Silver...Buy low...sell high...anyone heard of that before?

[TheRandyMan]

Sum up the goal of everyone investing into one phrase....

"Buy Low...Sell High."

Yep...that would be it. Now, take the slow, drifting, sideways sliding action of silver and gold this summer....not at all unexpected as the PM group as a whole tends to get a bit sleepy most summers...but...given that QE2 has "ended" and commodity prices on the whole have regressed a bit in the last couple of months, I certainly would have expected silver and gold to take a much bigger drop back through their support levels...

Guess what...it has not happened. Why? Well, that is a very good question...what does one observant trader think of that question, and, more importantly, answer?

Eric De Groot
Friday, July 1, 2011

The Silver Setup Needs A New Descriptive Catch Phrase
I've used phrase such as watch out and shock and awe to describe the setup in silver. After today's numbers, I add holy sh*t, batman to the hat of descriptive catch phrases. Certain interests are professionally buying this decline as the public slumbers through another lazy summer.

There's still some retail meat on the table. The once prime cuts are beginning to resemble table scraps.

http://edegrootinsights.blogspot.com/2011/07/silver-setup-needs-new-descriptive.html

Click this link to see some charts that have some answers to the questions you really want to know...really...I am not kidding around here!

 

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[thrillathahunt]

That's great! BUT, how low is it going to go before the end of the summer?

 

[Tuberale]

Increase of price depends on too many variables to make an accurate statement.

Chief among these is whether the US debt ceiling will be raised quickly. If it is (I think likely) then silver will rise higher. If it isn't, silver will rise astronomically along with most other precious metals and strategic metals. Add rare earths into that equation as well.

It's just another variable of the old economics principal of supply and demand. If demand is stronger than supply, prices rise.

 

[jim4silver]

No way to tell for sure what is going to happen. It does seem fairly certain to me at least that in the long haul PMs like gold and silver will be much higher.

But between now and then, no way to be sure.

If for any reason our stock market falls sharply, silver and gold will follow suit for at least a short time, like in 2008. This is because much of the $$$$ in the gold and silver market is due to hedge funds and other large institutions playing in the paper market. And if the stock market tanks they will liquidate at least some of their silver and gold positions to offset their losses in stocks. This would be a great time to add positions if it happens.

I have been thinking that they would for sure raise the debt limit before August. But now I am thinking maybe they will not raise it until later when the $hi* starts hitting the fan. That way the politicians who are opposed to it can say they held out till the last minute and only voted yes because it was necessary to save the economy, etc. If this scenario plays out, the stocks will take a hit for sure until they decide to raise the limit on the debt ceiling. Just my humble opinion.

Will be interesting to see what happens. I am shorting silver now via options on an inverse ETF as I have been for a while and have already made some profits. I hope to add to my physical position if silver tanks more, which I think it will this summer/early fall.

Jim