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Trading Volatility, Ballasted by Gold

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I am moving this thread to the trading section

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A brief dip to 40 would see silver just below 29. This down-leg looks to be just about played out.

 

 

LSIL just popped above 40 again, just when I thought they were going to sink it.

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LSIL just popped above 40 again, just when I thought they were going to sink it.

 

Yep, feel I'm sailing pretty close to the wind here as the bottom could be in. The buy order for 40 is still in place, but if the price tracks sideway and up over the next few weeks will then consider buying back in at 50. That would be silver around 32.

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I don't think so Romans, I feel liftoff for the previous metals is coming soon.

 

You might be right, but you might be wrong [i wear my short term skeptic hat for this trade]. Depends on how soon I guess. I can still buy back in near 60 if the price continues to strengthen in the next couple weeks. But yes, I think you'll see silver back to around 50 shortly.

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Down-trend confirmed?:

 

Wouldn't be surprised to see Silver head down in March, most years stocks are weak around that time, add the fiscal cliff debate, whats the odds of a market crash dragging silver down with it?

 

Just speculating.

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Wouldn't be surprised to see Silver head down in March, most years stocks are weak around that time, add the fiscal cliff debate, whats the odds of a market crash dragging silver down with it?

 

Just speculating.

 

it's always possble, but I will stick to my targets for this trade. Still looking for 40 to buy.

 

Fundamentals, or should I say the perception of them, swing one way then the other.

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R H

What is your thinking behind choosing 40 as a buy point, do you have a sell target?

 

Well, simply a re-test of what I think was the 'bottom' put in June/ July last year [i sold a large position at 60 on the spike]. Sell point, after the next buy, is a bit trickier, I'm envisaging another spike like the previous one to say 70 odd. If the trend changes will change my targets. The point of the trade is to increase US dollars, and I think most would agree by now that the volaitity of silver is a good instrument for this.

 

 

retest_zps9e6dca18.png

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The next couple of weeks could be interesting.

 

 

http://www.marketwatch.com/story/gold-flat-takes-cue-from-stable-euro-2013-02-08http://www.marketwatch.com/story/gold-flat-takes-cue-from-stable-euro-2013-02-08

Trade deficit numbers shrunk for the U.S., indicating positive signs for the U.S. economy,” so equities rallied and “tail-risk commodities such as gold suffered,” said Jason Rotman, president at Lido Isle Advisors in Newport Beach, Calif. “We expect gold’s next $30 dollar move to be to the downside.”

“Gold has major resistance at the $1,690 level, and has not been able to stay above that level recently,” he said. “With the S&P 500 /quotes/zigman/3870025 SPX +0.57% having an easy time staying above 1,500, we believe investors will continue to move into equities and away from gold and bonds.” See: U.S. stocks get China lift.

 

 

onem_zps1fdcd96a.png

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The next couple of weeks could be interesting.

 

At this rate, try next couple of days...breaking down again.

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It was mentioned earlier in this thread, but has anyone being tracking VIX and its associated ETFs?

 

In recent months, stocks have been steadily climbing, and are now at similar levels to before the banking crisis. This is despite the fact that nothing has really been done to fix the underlying issues. As such, VXX and UVXY (2x leveraged) are at lows. Right now, I see a sharp spike in these more likely than in PMs, certainly in the short term. Not for the faint-hearted of course, and I wouldn't consider holding for anything more than a short period.

 

3 month UVXY chart

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VXX and UVXY (2x leveraged) are at lows. Right now, I see a sharp spike in these more likely than in PMs, certainly in the short term. Not for the faint-hearted of course, and I wouldn't consider holding for anything more than a short period.

 

 

Interesting chart on the UVXY 52 week range 10.06 - 471!!!

 

With the current price just off the low, agree some upside potential even on a 3 month basis. Never tracked this before, so when has it moved sharp in the past? What's your definition of short term then emel?

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Interesting chart on the UVXY 52 week range 10.06 - 471!!!

 

With the current price just off the low, agree some upside potential even on a 3 month basis. Never tracked this before, so when has it moved sharp in the past? What's your definition of short term then emel?

 

I was thinking of taking a position for around 4 - 12 weeks. I know that these tracking ETFs tend to have a tracking error associated with them, and this increases as time goes on, so I wouldn't want to hold long term. However, for short term trading, I think they are fit for purpose.

 

With the trend in VIX being down over the last few months, this is definitely a contrarian play. And right on cue, I found this article today.

 

http://www.zerohedge.com/contributed/2013-02-12/volatility-index-closing-out-february-whimper

 

This details how VIX has broken support several times, and suggests the current upwards trend in stocks will continue to push VIX down until around May. The question is, will there be some sort of market shock soon which will cause VIX, and these ETFs to spike?

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