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« John Embry - Silver Is The Cheapest Asset In The World Today | Main | Monetary Policy Weighs on Precious Metals »
Thursday
Sep252014

Silver Prices: Your opinion is cordially requested

The question is where to from here?


Silver prices are falling apart as the chart shows;

$50.00/oz to $17.44/oz

Silver has also penetrated its support level at $18.00/oz

The technical indicators are on the floor.

The RSI is standing at 14, well below the oversold zone of 30.

For what it is worth we are of the opinion that a short term bounce could be on the cards here, but we not are sure if it is sufficient to place a long trade. A better strategy may be to wait for a bounce and then place a short trade. Alternatively if silver is on its way $15.00/oz then we could go short right now.

We invite your opinions so fire them in....

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If you would like to know which stocks we are buying and/or shorting please join us atStock Trader our premium investment service.

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Reader Comments (9)

Price forecasts are meaningless unless they are based on knowledge of the future plans of the few banks who suppress the American paper futures markets.

A huge crime to the detriment of mining companies and retail investors is taking place to which regulatory bodies turn a blind eye in line with the underlying government objective of concealing the reducing value of the US dollar.

The World Gold Council and Silver Institute give evasive replies to questions about their lack of comment and the mass media studiously avoid addressing the issue of suppression over time despite the wealth of information that it is taking place..

September 26, 2014 | Unregistered CommenterRobert

Silver's primary cost driver appears to be the gold price. Until the gold price breaks its 15-month support at about 1200, I am not worried about silver.

September 26, 2014 | Unregistered CommenterRick

I am a software developer. Why would my opinion matter unless you want to know whether I prefer you gamble long or short? You shouldn’t worry about what I think. If you don’t know whether to go long or short, then it really is gambling. It is quite acceptable to me for you to do nothing if you aren’t sure what to do. I hope that helps.

For almost two years , I have gotten grey hairs watching you guys short PM’s when I was convinced that things were about to turn around for them as a consequence of all the foolishness and knavery in the financial world. The Federal Reserve serves only the banks and all that talk about employment rates was/is nonsense. Yet, my account fattened from your pessimism about PM’s and optimism about the Federal Reserve. I would be sitting on a diminished net worth if I had followed my own inclinations. Yet, you want my opinion.

My opinion is that eventually some bank somewhere is going to fail, because one-customer-too-many declares bankruptcy, and no one will be willing or able to step up and bail it out (or bail it ‘in’). No one snowflake thinks it is responsible for the avalanche.

Or…some company will declare bankruptcy and no government will/can prop it back up.

Or…some retirement fund (like CALPERS) will be discovered to be near empty and the bank or hedge fund holding the funds will collapse with it.

Or…Saudi Arabia might accept other currencies than the petro dollar (now THERE’S an ‘Arabian Nights’ story). It kinda depends on how things turn out for that Syrian pipeline doesn’t it? The terminus will definitely be Europe but what will be the source? Iran or Qatar? That depends on who is sitting on Syria, doesn’t it? Alawites or Sunnis. ISIS is the Sunni block to Shiite Iran’s pipeline like a chess piece on a chessboard. Even when we declare ‘victory’ over ISIS, some kind of Sunnis will remain in northern Iraq. Yet, if we somehow fail there and Iran gets its pipeline to friendly Syria, Saudi Arabia will be fed up with the US and turn to the BRICS. Saudi Arabia recently bought a lot of Chinese weaponry. They may even have traded oil for it in lieu of petrodollars. Without the petrodollar, we’re a third-world country.

Or…the West will find that twelve aircraft carrier groups are impotent for financial warfare against the BRICS’ and the dollar will start to really fail. Of course, when the BRICS create their own anti-SWIFT system, you’ll see each side use a STUXNET-like virus to take each other’s network’s down. Now, there’s some Mutually-Assured Destruction and we’ll have bigger things to worry about than how much electronic money we think we have in some bank somewhere.

When one of those possibilities eventually happens, your shorting investment trades will evaporate and my account’s funds will evaporate with them. That’s what happened in 2011 when your long trades evaporated. I lost $30K that year, a full 1/6th of my net worth.

My opinion is that I should create a separate brokerage account and move half of the current account that follows your recommendations’ funds to the new account. With the new account I’ll buy the stocks that Doug Casey recommends in his newsletters (AFTER the next equities correction). I am quite sure that you and my original brokerage account (that follows your recommendations) will continue to make money until something (eventually) happens and you get caught on the short side of a bull PM market. I’ll sleep better at night knowing that my funds are more diversified.

I hope that I haven’t offended you. I hope we all get phenomenally wealthy. As I said earlier, I am amazed that you have done so well these past two years. Good luck calling “the bottom”. Sincerely, Steve

September 27, 2014 | Unregistered CommenterSteve

The answer is rather simple-patience,relax and buy as much as you can afford.Reward will inevitably come,sooner or later.

September 27, 2014 | Unregistered CommenterJoseph

Rick,

It could break the $1200/oz this week, in which case you will be worried and may need to act.

September 27, 2014 | Registered CommenterSilver Prices

Steve,

No we are not offended and appreciate the effort that you have put into your response.

As for the shorts getting crushed well that all depends on just how exposed they are at the time. We have closed short trades and banked the profits, as in 2013 when all of our 33 trades were closed at a profit. So with a small number of trades open at any one time with an allocation of just 5% of the capital we should not suffer that much when we get things wrong, although we do agree there is nothing certain in this business.

The reason we asked for the readers comments is so that they can go into the mix with a whole lot of other considerations, but we will only place trades that believe we will be profitable regardless of what anyone else says or does. In 2011 we took a hit but didn't lose money that year as our trading record shows.

Good luck with purchases when you make them, we really do hope that they go well for you.

September 27, 2014 | Registered CommenterSilver Prices

Joseph,

I cant say that I'm overly confident in your belief that they will come right sometime - the last bear market in gold lasted 20 years and I'm not that patient.

September 27, 2014 | Registered CommenterSilver Prices

I note that I am getting a lot of e-mails telling me how to invest in the US stock mkt. Whereas at the 2009 bottom I got none. I am unsure as to how gold dropped quite so far from its 1900$ high, but Moriarty made a very public call that silver was at a high. He has hit a couple highs and lows dead on. The writer of the "oldest" newsletter has said gold is a buy.
Jim Rogers, whose book about commodities got me in this mkt, has suggested there will be a buy point for him within the next two years. The newsletter that you write has done well on the gold/silver correction from 2011. I congratulate you.
What I would suggest is that you make your arguments public, both pro and con, and see where people are at. It looks like this is such a forum.

For myself I simply fail to believe that the FEDS of the world have everything under control. Seems like they are doing an amazing tight-rope walk. Perhaps they can manage all the world into a beautiful spot, but to quote T. H. White's Lancelot, "Me thinks it's a tall order."

Pete

September 28, 2014 | Unregistered CommenterPete G

Pete,

Thank you for your very kind words, much appreciated.

Calling changes in direction is possibly the most difficult to do - that's why we always ask the readers to 'go gently' and all of us can get it wrong. I become most fearful when the crowd agree on which way things are going - we all want to call the bottom and hit the bulls eye as that would be wonderful.

However, we are prepared to miss some of the next rally in favor of a tad more certainty before we trade.

Take care, Bob K

September 28, 2014 | Registered CommenterSilver Prices

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