hi romik has the "short interest in SLV" ever been published ? some of this weeks move is probably related to rollover in the futures from march 08 - may 08
This thread is really instructive as to the nature of markets, sentiment, technical analysis, different market timeframes and so on. I'll give a few examples. Romik's investing/trading in silver: He took a long-term bullish view on silver, for fundamental reasons. When silver dropped shortly after the thread was started, he added to his underwater position. This was good trading - he was a long-term bull, and used a medium-term price collapse to add to his positions at more attractive prices. The long-term bull market was still intact - periodic corrections when sentiment gets overdone are commonplace in multi-year bull markets. So, good move romik. However, he then makes this strange post "the weekly chart looks awesome". What is this about? He is a bull for fundamental reasons, then he tries to justify it by technicals signals? Totally contradictory. Well, shortly after this "technically bullish" signal, the market then tanked for 6 months. Bad move - this shows the importance of having a *consistent* trading strategy. Do not get long for purely fundamental reasons, saying you are gonna ignore the short-term and technical factors, then start using technicals to justify your position. If he had been following technicals, he would have exited in summer 2006 at a loss. Another example was this: " ascending triangle confirms a high possibility of a good short term breakout, I am all excited to see how it plays out, I won't be participating in any short term trading of silver, I think it will be extremely volatile around $150 ($15)". Again - if you are in a long-term position, forget the short-term technicals, it can only distract you. Lesson #1: stay consistent with your trading method for any given position. If you are long-term investing, stick to that method and forget short-term moves and technicals. The next interesting point was the criticism he got from quark early in the thread. Quark totally correctly noted that sentiment to silver was extremely bullish, and there was risk of a large correction. In terms of where the price went soon after, he was spot on. However, his criticism of romik was 100% wrong. Romik was not trying to time the next 3 months in silver, as a trader. He was investing on a 5-10 year time horizon. So, we must evaluate quark's comments on a long-term time horizon. In this respect, it's obvious that quark was about as wrong as it is possible to be. Silver is up 40-80% from where romik was buying. I think this shows the importance of knowing what timeframe you are talking about. Sentiment for an asset can change radically over the medium and longer term. So sentiment in spring/summer 2006 was ultra bullish for silver, and was totally wrong. Quark was correct to be bearish near-term. But by late 2006 sentiment was not bullish at all. Quark tried to project sentiment at the time of his post, into a prediction for silver prices over a 1-2 year+ time horizon. This was a really bad mistake, and he proved to be completely wrong. You must make sure you match the reasons for your prediction, with the timeframe those reasons apply to. If sentiment is ragingly bullish, that is reason to be bearish - but only until that bullishness disappears. Once the bullishness is gone, your rationale for the trade is non-existent and so you must exit and then reasses market conditions. Another example of the mismatch in timeframes was SethArb's comments. He kept making references to short-term price action and technicals. But this was a thread about long-term fundamentally driven silver investing/position trading. Short-term technicals are thus irrelevant, and can actually be very harmful as they may tempt you to exit your position. Lesson #2 - match your timeframes. Do not make the mistake of drawing long-term conclusions from short-term conditions, or vice versa. Next we have the issue of people who stayed on the sidelines e.g. pumpanddumper: "Man, I want to get back on the SLV bandwagon. I was in last June around $112 at around a $11 spot price to see the etf go below $100. Obv., I should of bought more on the way down but got out even. I feel like I missed the run and hoping for the manipulation to kick in again one more stride and bring down to $10 spot." You can't play a multi-year bull market by hopping in and out on short or even medium-term moves. You have to buy and hold, and be prepared to sit through some volatility. Again we see the mismatch in timeframes and position - he is a long term bull, but instead of just buying and staying long, he gets out at breakeven, and then later on once he misses the rest of the rally, instead of just buying again, he is waiting for a large pullback which never happened. Another example, from Akuma: "I have unloaded most of my position and I wish I had it back. $20.00 does not seem unrealistic with the bull phase in commodities and the weak dollar. Still holding palladium though. Akuma" Lesson #3: if you want to profit from a long-term bull market, the only real way to do this is to get long today, stay long, and continue staying long through all the noise and corrections. Do not wait for pullbacks, do not sell out because you went underwater and then got back to breakeven, do not sell out just because the price has gone up a lot and is "overbought". Buy today, add on dips, and just hold on as long as the bull market remains intact. Only exit when you have signs that you are at a multi-decade top i.e. silver on the cover of businessweek, silver way above its old all-time high of $50, people melting down jewellery to sell the metal etc. All the signs you got in 1980. I would encourage anyone to drag up a long-term silver chart, and go through this thread. You can learn a hell of a lot about how to trade long-term bull markets, and how to avoid the most common errors.
if there is a correction in March ... any thoughts on how quickly it could happen or how far down SLV might go ? or how much higher SLV goes before any meaningfull correction?
If you are into investing then I would listen to T.Butler, I have partially accepted his take & invested both into physical & SLVs. There are lots of brokers you can invest with, up to you to make that choice. I see we are at 29 vs 29 now.
Interesting ratio we having now, almost 50/50. Today I made a further investment of 50x1000oz silver bullion bars. $12,030 each