Silver looks fairly near a top

[Ghost of Cutten]

The move is going parabolic into the prior all-time high from the Hunt bubble. IMO it is time to start scaling out of longs/calls into this strength. I just sold 1/3 of my position, placed a trailing stop at $47 on another 1/3, and will offer the rest out if it hits high 48-49s. My plan is to then start accumulating some puts as the price hits 49-50, to bet on a reversal back to the low $40s/high 30s.

When gold hit its all time high a few years back, it went a tad higher (slightly above $850) then reversed 10% fairly quickly. Silver, being more volatile and a more speculative/crowded long, would probably fall 15-30% if this pattern repeated. IMO the top is likely to be somewhere from $48-52.

As a hedge against a crazy blowoff rally, putting a small amount of capital into $55 calls might not be a bad play.

 

[smcmahon83]

Ghost of Cutten,

I'm right with you on that call. How are you setting up your short? I'm thinking that possibly because the market gapped because of overseas trading driving up prices during the US holiday, profit taking tomm after the gap could take out alot of stops. Where are you placing your short trade? Below the prior day's low?

 

[dumb_mother]

rather than that just hit my bid on the dec 2012 100$ calls at .70

 

[peilthetraveler]

You guys have some really weird strategys of gauging how the price of something will move. Many of you were saying it was a top at $27 and $30. Let me give you all some advice....there is no top in silver. For every extra dollar that is printed, silver is going a little bit higher. The top is not in just because we hit new highs...you want to know when the top will be in? The day Bernanke turns off the printing press.

(Isnt Blythe also calling a top in silver at $50? LOL)

 

[peilthetraveler]

Quote from Ghost of Cutten:

I just sold 1/3 of my position, placed a trailing stop at $47 on another 1/3, and will offer the rest out if it hits high 48-49s.

Just passed $49.15 Guess you are out now huh? We are having a huge run as i type this. Up over 3 bucks already tonight.

 

[Ghost of Cutten]

Out and short (via puts, too nuts for outrights) from 49.6.

 

[peilthetraveler]

Quote from Ghost of Cutten:

Out and short (via puts, too nuts for outrights) from 49.6.

I hope you covered at $49.01 Its going back up again.

 

[Ghost of Cutten]

Quote from smcmahon83:

Ghost of Cutten,

I'm right with you on that call. How are you setting up your short? I'm thinking that possibly because the market gapped because of overseas trading driving up prices during the US holiday, profit taking tomm after the gap could take out alot of stops. Where are you placing your short trade? Below the prior day's low?

It's too risky for outrights so I am shorting futures against my long calls to create a synthetic put position. I have some futures short and some long May, June, and July 45 calls against them.

Note - for daytraders, we look like we just topped. A momentum strategy here using Darvas/Livermore box breakdowns and a trailing stop could be profitable. I am max short so no more risk for me.

For any noobs here, trade small because this could easily drop $4-5 in 1 day (or rally, if we haven't topped yet).

 

[peilthetraveler]

yeah, some pretty wild swings tonight. I'm sure at least a few hundred people have went bankrupt in the last 10 minutes with these swings up and down.

 

[OTCkrak]