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Trading Volatility, Ballasted by Gold

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Clive Maund on Volatility:

 

http://news.goldseek.com/CliveMaund/1293805679.php

The motto of the elites is "Privatize the profits - socialize the losses". They will eventually lose control of course and when they do the Treasury market, which is the aorta of the US, will collapse, but that may take a year or two yet. In the meantime we should witness a severe decline in the currency and roaring inflation. This is why gold and silver continue to look like the place to be, although after their almost unbroken rise of the past year or so the risk of a heavy correction setting in is rising. Here again we have a paradox, for while gold and silver are becoming increasing vulnerable to a correction after their long steady uptrends, such uptrends typically end with a parabolic acceleration and blowoff phase with greatly increased public interest. This still hasn't happened which is why we suspect that a spectacular near vertical rally may be just around the corner - and we certainly don't want to sell out too early and miss that.

 

My way of dealing with the apparent paradox has been to pragmatically split the more volatile silver from gold. Invest heavily and early in gold.... buy and hold.

 

Then wait in a large dollar position. Should the correction come, buy silver low and then sell later on a spike... which serves to balance the "portfolio".

 

 

Looking at the above chart on long term gold, there could, on the face of it, be a correlation with what Maund is saying here; gold could spike to 1600 [the top of the channel] before correcting to 1300 or so... Personally, I think that kind of volatility in gold looks to have died down a bit compared to earlier years.... but you never know.

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Here's a closer view of the long term trend [stretches right back through the decade] on the log. It's suggesting a sideways consolidating pattern for a few months with a possible retracement to 1350... before heading up again. Notice the previous moves up retraced roughly 50%.

 

 

x-2.gif

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Has the worm turned? Will be interesting to see where silver closes out at the end of this month.

 

 

longsil.gif

 

 

Some might notice a discrepancy between the above charts on silver and gold. That's because I'm wearing different hats for each: in the case of gold, the investor's hat; in the case of silver, the trader's hat... and assuming there may be some massive volatility. Of course, if such volatility is seen in silver, gold would go lower before resuming its upward trend.

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You nailing your colour's to $21/2 USD by the end of March then?

Could go lower.... if 2011 is the year the bear rally in the stock markets finally rolls over. I think it could then track upwards towards 50 over the following 2 years.

 

As for buying silver here, no rush. I'll be holding off and seeing what it does for the next 6 to 10 months.

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Could go lower.... if 2011 is the year the bear rally in the stock markets finally rolls over. I think it could then track upwards towards 50 over the following 2 years.

 

As for buying silver here, no rush. I'll be holding off and seeing what it does for the next 6 to 10 months.

 

WELL thats just not good enough, I really don't know what to do with my spare paper :lol:

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A fearful symmetry?

 

 

sil3.gif

 

Your symmetry is not quite perfect, but could we be heading for 25 slightly sooner than the drawn line?

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Have not heard from Romans Holiday or Wanderer recently - hope they are OK ?

Hi LD. I've had a change of lifestyle, and am no longer in the old routine [hate routine]. I'll post from time to time, but doubt I'll be posting as prolifically as before.

 

Still well ballasted by gold, and keeping an eye on the volatility in silver. I think even the most fervent silver bulls are expecting a correction soon. The correction will probably equally surprise to the downside as it has to the upside.

 

It's all about minimizing risk not maximizing paper profits. The temporary price of an asset/ commodity can evaporate overnight.

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Hi LD. I've had a change of lifestyle, and am no longer in the old routine [hate routine]. I'll post from time to time, but doubt I'll be posting as prolifically as before.

 

Still well ballasted by gold, and keeping an eye on the volatility in silver. I think even the most fervent silver bulls are expecting a correction soon. The correction will probably equally surprise to the downside as it has to the upside.

 

It's all about minimizing risk not maximizing paper profits. The temporary price of an asset/ commodity can evaporate overnight.

 

Hey nice to see you back Romans Holiday, especially when the metals are on record highs. :)

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It's all about minimizing risk not maximizing paper profits. The temporary price of an asset/ commodity can evaporate overnight.

Minimizing risk and maximizing real, tangible profits. That's why I've just swapped some silver for gold.

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Minimizing risk and maximizing real, tangible profits. That's why I've just swapped some silver for gold.

Nice. Good to see you recognizing the differences between gold and silver. Goldfinger you are!

 

With most of your worth still in silver, you're still betting silver will go higher here. But then, having seen a crash in silver at an earlier date, maybe you're quite prepared for some volatility in the interim. At the end of the day, besides being night, it's different horses for different courses, and pursuing a course which you're comfortable with.

 

I'm still looking for a trade in silver... next time round. Perhaps mid 20 odd..... an idiosyncratic prediction doubtless to suit my own strategy which demarcates silver in order to hedge a large core in gold.

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Hi LD. I've had a change of lifestyle, and am no longer in the old routine [hate routine]. I'll post from time to time, but doubt I'll be posting as prolifically as before.

 

Still well ballasted by gold, and keeping an eye on the volatility in silver. I think even the most fervent silver bulls are expecting a correction soon. The correction will probably equally surprise to the downside as it has to the upside.

 

It's all about minimizing risk not maximizing paper profits. The temporary price of an asset/ commodity can evaporate overnight.

 

Hello R.H have to admire your discipline, but short term are you not kicking yourself just a tiny bit?

 

Been heeding a few others the last week or so in swapping some Silver to Gold, only wish i'd have loaded up more Silver in the first place, decisions, decisions.

 

Good to see you back.

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Hello R.H have to admire your discipline, but short term are you not kicking yourself just a tiny bit?

 

Been heeding a few others the last week or so in swapping some Silver to Gold, only wish i'd have loaded up more Silver in the first place, decisions, decisions.

 

Good to see you back.

Hi Riggerz. I'm more an investor than a trader.... though am open to some trading. So in my scheme, buying and selling silver is always a trade. I've missed a trade, but am sure there will be another opportunity to trade... with ongoing volatility. I haven't exactly been pauperized by keeping most of my worth in gold these past few years.

 

Im not kicking myself because [emotional] discipline is of extreme importance for the investor. As an investor, I keep to a rational plan, which serves well in choppy markets. In my mind, the desire to maximize gains equates with greed, and the investor often comes unstuck chasing that chimera..

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Hi LD. I've had a change of lifestyle, and am no longer in the old routine [hate routine]. I'll post from time to time, but doubt I'll be posting as prolifically as before.

 

Hi RH. Good to hear from you. Cant blame you for cutting down on the number of postings. I thought I was bad on this place, although I have cut down a lot! Guess you are looking forward to getting your place in the hills and panning for gold! Dont forget to plant some fruit and veg!

 

I acknowledge what you say about risk............... But when the trends are clear............ Risk aversion can be a risk also.

 

Mind you I am not able to boast I enjoy real bumpy lumpy returns!

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Hi RH. Good to hear from you. Cant blame you for cutting down on the number of postings. I thought I was bad on this place, although I have cut down a lot! Guess you are looking forward to getting your place in the hills and panning for gold! Dont forget to plant some fruit and veg!

 

I acknowledge what you say about risk............... But when the trends are clear............ Risk aversion can be a risk also.

 

Mind you I am not able to boast I enjoy real bumpy lumpy returns!

Averse to risk, I perceived gold to be the ultimate bastion a while back [strongest symbol of money]. Crazy thing about gold is it will go up iwith commodites, but then also stay up when commodities turn back down. This is why gold has tracked up so steadily this past year [as predicted around 20%], and not exploded like silver. The risk with silver is the elasticity of the price.... good if you can trade it.... I'm a crap trader... for now. :lol: But i reckon I'll get another crack at it.

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Focusing on the time-line, silver traders may not need to rush much here. From the previous collapse, silver took a good 5 months to recover.

 

silvertime.gif

 

 

late-1.gif

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Low 20s looks possible.

 

 

sil-10.gif

 

That would be a mouth watering sight....."attention, vehicle reversing" :lol::lol:

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Hey RH can I ask what happened to that pal of yours that went off and did the VIX thing. Did you put him on the silver escape plan?

 

Also have been meaning to ask, if one is not a market timer then pound (or dollar) cost averaging can be a useful approach. Its not something that I have seen you mention. But a gentle slide into one of those investments that you have been thinking of does not appeal? Just a question, not intended to make you jump into market action....

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Hey RH can I ask what happened to that pal of yours that went off and did the VIX thing. Did you put him on the silver escape plan?

 

Also have been meaning to ask, if one is not a market timer then pound (or dollar) cost averaging can be a useful approach. Its not something that I have seen you mention. But a gentle slide into one of those investments that you have been thinking of does not appeal? Just a question, not intended to make you jump into market action....

Hi LD, this is my trading/ hedging thread. Elsewhere, I've always said a dollar/ pound averaging into gold is the way to go if one was underweight in bullion.

 

The guy who lost money on VXX, I told to invest in silver [he is bullionless]. I saw this as a way for him to regain his lost money, and be "catapulted" into gold. Unfortunately, a case of once bitten twice shy for him though.

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All that's shiny is not gold, and exited my silver trade at 17.90. I find it an easy trade to make - psychologically speaking - as am also bullish on the dollar, for the next couple of years anyway. And silver I think will remain super volatile against the dollar. Also making this trade easier, is that I can consider it a hedge [dollar proxy] against my rather large buy and hold approach to gold.

 

If I get this speculative trade wrong and silver does break out to the next level, the chances are that it will still remain volatile and likely dip at some point to where I exited, thus enabling me to get back on board. I think this is quite unlikely though, and think silver will remain in the range seen this year. Being both a gold and dollar bull gives you quite a different perspective on silver. ... though I'm also long term bullish silver.

 

This from over a year ago.

 

Strategy remains the same with this trade, and will look to buy at a lower price in the next few months. Being speculative, I half expected to be wrong about the trade, but wasn't too concerned as thought silver would remain volatile.... where another entry point would present itself. I doubt it will dip below 20, and perhaps mid 20s will be a better buying point. That my buying point could be higher than where I exited doesn't concern me as my intention is/ was not to accumulate silver ounces [with this hedging trade] but to accumulate US dollars, in the least riskiest way. All I missed was a trade, and there's always another opportunity to trade.

 

All it would take is one good trade [and a sizeable one] to balance out the gains made from a long term core posiiton in bullion. Overall gains could be equivalent to being 100% in bullion, yet with a better hedged position split between gold and US dollars.

 

 

silverdown.gif

 

 

Clive Maund looking at AGQ.... looking at the shorter term.

 

http://news.silverseek.com/CliveMaund/1305508577.php

 

proshares.gif

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