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Trading Volatility, Ballasted by Gold

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I'm bullish on bullion [with a large "buy and hold" core position]. I take an extreme view on silver volatility here [with US dollars] as a hedge against that core. Won't short silver, but will buy [and sell later] if the price falls into the mid-20s.

 

Being a hedge, if the trade doesn't eventuate, no harm done.

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I agree but aren't you surprised that Ag has managed to hang on so long at the $35ish level?

Hi NB, if the last spike and correction is anything to go by then silver could be in a multi-month correcting mode...especially if there's another round of deleveraging.

 

The chart in post 201 above is along these lines.

 

I deliberately choose to take a more extreme view on silver volatility.... as am already heavily long gold/ silver. The trade I'm looking for here is a hedging one... of increasing US dollars.

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The argument for trading dollars against silver... the queen of volatility.

 

 

http://news.goldseek.com/GoldSeek/1308238838.php

 

7-spx20QE3.png

 

 

However this too will only be a counter trend affair. QE is the cause of our problems and more of it isn't going to make things better, it will only make them worse as it will start to spike commodity prices again into a rapidly weakening economy. Remember spiking commodity inflation is what caused this in the first place. Doing it again as the economy rolls over into recession is only going to guarantee that this turns into a depression instead of just a severe recession.

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I agree but aren't you surprised that Ag has managed to hang on so long at the $35ish level?

Silver down to 33. Not far from there to the 20s. If the market then spiked down on some sell-off, that could be a good op to buy . No hurry but.

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sil-11.gif

 

Silver in the 20s looking more likely. Maybe a slow grind down, capped off with a spike down, before going on to greater things.

 

 

 

 

sc-2.png

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corr.gif

 

I'm bullish on bullion [with a large "buy and hold" core position]. I take an extreme view on silver volatility here [with US dollars] as a hedge against that core. Won't short silver, but will buy [and sell later] if the price falls into the mid-20s.

 

Being a hedge, if the trade doesn't eventuate, no harm done.

Updated:

 

silllll.gif

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svlr.gif

Well, there's one I got right. Not that I'll be able to profit from it as the exact day on which i spent the dollar hedge on land, silver crashes. Can you believe it.... after waiting patiently for near a year. :lol:

 

What tripped me up was the mental wrangle over whether to buy this bit of land or not. I finally bought it as it's a beautiful piece of land, a real asset, another hedge of sorts.... though the purely macro/ monetary/ economic side of me had its qualms. In finally deciding to buy it [with dead-line looming] I forget to consider how to buy it. I should have taken out a 50% mortgage, which would have enabled me to maintain the dollar position. I would've thedn be able to buy the silver double leveraged ETF with silver at 28 odd... hold and sell in a couple of years when silver is breaking through 100.... making my millions. Oh well, you always get to fight another day right..

 

With the demise of the US dollar hedge, I'll now focus on the gold/ silver ratio, which I've not had much luck in trading. One thing to my advantage I'm largely in gold at the moment, and with the ratio still moving up there could be a good op to trade to silver [using goldmoney]. I'm thinking that the band to trade might be lower than the traditional one espoused.... instead of theo the 50/ 80 band, I'll consider a 40/70 band..... as silver/ gold recently went to 35.

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Moved some gold into US dollars at Goldmoney , and will move gold bullion into goldmoney to re-stock.

 

Will look to spend the dollars soon on the above ETF with silver at say around 27ish, and think about swapping all other gold to silver at Goldmoney. That may see me "all in"" silver for a bit [maybe a couple of years].... before selling the ETF back to dollars, and silver back to gold.

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corr.gif

 

I'm bullish on bullion [with a large "buy and hold" core position]. I take an extreme view on silver volatility here [with US dollars] as a hedge against that core. Won't short silver, but will buy [and sell later] if the price falls into the mid-20s.

 

Being a hedge, if the trade doesn't eventuate, no harm done.

 

This was a great call R.H, do you reckon we are on the floor for now? Thanks for the mention of AGQ not been watching that, my eyes have been on LSIL. Do you know that one? If so would it interest you rather than say AGQ etf you mention?

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Moved some gold into US dollars at Goldmoney , and will move gold bullion into goldmoney to re-stock.

 

Will look to spend the dollars soon on the above ETF with silver at say around 27ish, and think about swapping all other gold to silver at Goldmoney. That may see me "all in"" silver for a bit [maybe a couple of years].... before selling the ETF back to dollars, and silver back to gold.

 

Finally you have been vindicated RH (after all that abuse you took), well done!

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Finally you have been vindicated RH (after all that abuse you took), well done!

Thank you kind sir. The irony is I'll be changing my colors to a silver bull here. Viva la volatility! B)

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This was a great call R.H, do you reckon we are on the floor for now? Thanks for the mention of AGQ not been watching that, my eyes have been on LSIL. Do you know that one? If so would it interest you rather than say AGQ etf you mention?

Not sure about a floor yet. The factors I'm considering is 1] real price, and 2] time:

 

1]

2008: 20 down to 10

2011: 50 down to... 25?

 

2]

If I remember correctly the crash of silver in 2008 took a few months to play out... then a few months to rebuild a base, so am thinking not too much of a hurry. If 25 were the target, i reckon buying anywhere in the upper 20 range should be pretty good. Consider that silver may recover quickly and go on to new strengths.... through US 100 odd in the next couple of years I reckon. That would be the time to take profits of the table.

 

Using the double leveraged ETF could see a profit towards 800%. Haven't looked at LSIL yet, will do when i get a bit of time.

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longsil-1.gif

 

Log chart shows a good chance of silver falling further.... perhaps only half the ways so far.

 

 

 

silshort.gif

 

If the previous crash is anything to go by, it may take a few more months for silver to bottom. Target to buy 25.... target to sell 100.

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2]

If I remember correctly the crash of silver in 2008 took a few months to play out... then a few months to rebuild a base, so am thinking not too much of a hurry. If 25 were the target, i reckon buying anywhere in the upper 20 range should be pretty good. Consider that silver may recover quickly and go on to new strengths.... through US 100 odd in the next couple of years I reckon. That would be the time to take profits of the table.

 

Using the double leveraged ETF could see a profit towards 800%. Haven't looked at LSIL yet, will do when i get a bit of time.

 

Might be worth a look, it bounced from around 40 to above 54ish from memory early last week. Didn't watch it after I bottled out at 51 as cursing I got in bit too late at 47 ho hum.

 

Timing is everything with this one though and volatility high.

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Might be worth a look, it bounced from around 40 to above 54ish from memory early last week. Didn't watch it after I bottled out at 51 as cursing I got in bit too late at 47 ho hum.

 

Timing is everything with this one though and volatility high.

I'm no day trader. This trade for me is more a medium term "position" trade. Powder is primed and loaded [in dollars of course] and looking to buy with silver in the 20s, and AGQ below 100. I don't mind if it falls further as I plan to sit on it for a couple of years; if silver doubles from 25 to 50 then AGQ quadruples. If silver doubles again, so to does that quadruple quadruple again. 100 to 1600 odd... then back to dollars of course. :rolleyes:

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