Pailin's Trading Corner

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Sat, Jan 21, 2012 - 10:57pm
Jager06
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Buying physical

Some of you may remember my tale of buying physical silver last week. I took a buddy that fought with me in Iraq to my favorite coin store and hung out with a great guy there, the owner whose name is Howard.

Howard was a chess champion who played against the Soviets in the 80's and had been collecting and trading coins and precious metals since he was 6 years old. Excellent conversationalist and well worth listening to his well thought out views. He was also totally down with the silver manipulation, economic BS and was an asset to those who were trying to get some stability built into their lives.

I think you all know where this is going. I was Howard's last customer, and wanted to share little bit of a pretty cool guy with some pretty cool folks here too. Not everyone lurking here makes a difference here. Sometimes the difference is made one handshake, one conversation, one friend at a time.

Best wishes to you all, and Thanks Howard, wherever you are buddy.

Théros, trýgos, pólemos

Jager06

Sat, Jan 21, 2012 - 11:26pm
tonym9
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Bestever: That volume info

Bestever:

That volume info you post is critical news. Netdania shows dead volume. I can't post it here (don't know how) but if you go to netdania.com and pull up silver spot USD you'll see the no volume move. Your info is a direct contradiction to that info. BIG difference. Click the volume icon at the top right of the chart.

Keep the thoughts coming.

I need to start back data checking netdania. I've been lazy and just watching one chart flipping between time periods with overlays. Might have burned me. A strong volume move and I would have gotten out to re-eval later when ZSL started to tank and silver was rocketing up. Volume data is a big piece of the puzzle for me when I'm daytrading between appointments....hmmmm.

"No! Try not. Do, or do not. There is no try." -Yoda Levitation will levitate until levitation doesn't levitate. Rates be the key matey.
Sun, Jan 22, 2012 - 2:15am
ghost
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Whenever there is a huge %

Whenever there is a huge % change in one day whether it's up or down you are going to get higher than average volume in stocks and options that track the underlying. Especially for Cartel controlled playthings like the SLV.

The increase in participation on the options side when the underlying makes a big move especially the call side doesn't necessarily mean it's bullish. Calls were traded much more and heavily probably a combination of closing out profitable positions, short covering, writing calls... who knows?

NGD, KGC, HL all had noticeable spikes in volume and bullish bets on call options for Jan/Feb at one point or another in Nov/Dec... look what's happened to their prices since.

If the surge in price was really due to a single big buyer like Sprott going all out and buying loads of futures around the same time for his future offering, good for him and those who took advantage of the spike. But unless big and new money decides to enter the silver futures market, who's going to join the party right after Silver has run up 5% in one day and is approaching very strong resistance (other than dumb money & retailers)? And after the latest COT Silver report which is quite bearish with Commercials starting to pile in the shorts, I'm not sure that's very enticing to start going long at this point. JMO.

Sun, Jan 22, 2012 - 2:44am
Abraham Bernanke
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Weekend News and Views Read

Here is the weekend Newspaper In December 2011, the European Central Bank (ECB) made almost 500 Billion Euros “available” to European banks in the form of three-year loans at 1.0 percent interest. By January 17, 2012, well over 500 European banks had borrowed ALL that “money”, thrown in a bit more of their own, and had parked $528 Billion in the form of overnight loans with the ECB. On the same day, the ECB cut their reserve ratio requirements in half - from 2.0 percent to 1.0 percent, in a still more desperate attempt to get the European banking system to lend. But the European banking system is afraid to lend to anybody - except the ECB. Why? Because only the ECB in Europe has the legal capacity to print Euros. In the US, President Obama started off the new year by delaying a request to Congress that they increase the Treasury’s debt “limit” by $US 1.2 TRILLION. He didn’t delay very long, though. On January 12, he made the request, giving the Congress 15 days to “comply”. On January 18, the House of Representatives actually rejected Mr Obama’s request by a vote of 239 to 176. This is not a big enough majority to overcome the promised Obama veto. But Mr Obama will almost certainly not have to exercise his veto. The request must be rejected by the Senate before that potential comes into play and the Senate is controlled by the Democrats. Thus, by the end of January at the latest, the Treasury’s debt limit will have been increased by $US 2.1 TRILLION in three stages in less than five months. In the UK, the Bank of England routinely rolls over their latest “quantitative easing” program at every meeting. In the US, the Fed is carefully not ruling out another bout of the same medicine as they continue to manipulate interest rates under “Operation Twist” and contemplate buying another huge swathe of underwater mortgage paper. And now, the IMF is looking around for ways to increase their lending capacity by $US 500 Billion - just in case. This puts even the US Treasury debt limit hikes in the shade. At present, the IMF has a “lending capacity” of $US 385 Billion. A $US 500 Billion increase would boost that by 130 percent - in one hit. This “deal” will be put to G-20 finance ministers and central bankers when they meet in Mexico City on February 25-26. According to a recent article in Bloomberg, this is the latest task which the Federal Reserve have taken upon their broad shoulders. The next Federal Open Market Committee (FOMC) meeting takes place over the two days January 24-25. At the end of that meeting, Mr Bernanke will give a press conference. He and his fellow FOMC members will also publish their own “predictions” for the future direction of the Federal Funds Rate. One would have thought the FOMC already did that last year when they promised to hold the rate at its present 0.00-0.25 percent level until (at least) mid 2013. The reason for the Fed’s new “openness” is simple. They are desperate to keep alive the myth that further infusions of “money” can succeed even though past infusions have so clearly failed. As the mainstream US financial press would have it, the Fed is “monitoring risks” to the economy and has carefully not ruled out ANY course of action to be taken if necessary. That has, in turn, encouraged US financial markets to go on betting on another bout of money printing via the introduction of QE3. As one US stock analyst put it: “The investment community is almost regarding quantitative easing as a free good. From October to November 2011, US household borrowing on credit cards, car loans, student loans etc jumped 10 percent. This burst of “consumer spending” was welcomed by many as a sign of returning economic “health”. In reality, it is an infallible sign of growing desperation in the US middle class. This spike in borrowing, which includes a huge increase in borrowing from retirement plans, is being done simply for day to day expenses. The result so far has been the biggest one month increase in US consumer indebtedness in a decade. Without income growth, this cannot continue. An agreement between Japan and China to start the DIRECT trading of their currencies WITHOUT using the US Dollar as the common intermediary. There has been a similar agreement in place between China and Russia for well over a year. In the wake of the US-inspired embargo on the Iranian financial system and Iranian oil, India has approached Iran with the view to buy oil without the use of US Dollars. Indian newspapers report that India has suggested the use of Gold instead. All over Asia, more and more nations are moving towards bilateral and multilateral trade done without the participation of either US Dollars or Euros. If the agreements which have been popping up all over Asia are consummated, the days of the US Dollar as the world’s reserve currency are coming to an end. When (not if) that happens, the US government will find itself in exactly the same position as peripheral Europe has been for the past two years. It will be staring with horror at interest rates which are exploding upward on debt which is exploding even faster. The Standard & Poor’s European downgrade has acted as something of a “catharsis” on global markets. The threat of the actual downgrade acted to put a floor under most of the markets. Its delivery has seen them rise further, to the growing disquiet of most of the financial “professionals”. On Monday, January 23, the European finance ministers meet in Brussels to find out if Greece has successfully “restructured” its debt by foisting a LARGE haircut on its creditors. On January 24, the Federal Open Market Committee (FOMC) begins its first meeting of 2012. The meeting ends on January 25, at which point Mr Bernanke will hold a press conference. His ultimate goal at this conference, as it has been in all previous ones, will be to “reassure” holders of US government debt that the fate of the Greek creditors will NOT befall them on his watch. The day before Mr Bernanke speaks to the press, President Obama will be delivering the last State of the Union address of his current presidency. His goal will not differ greatly from Mr Bernanke’s I think that's enough news update for now, happy Sunday Reading news Abe
SWAGER on. Silver - Wine - Art - Gold - Energy - Real estate
Sun, Jan 22, 2012 - 6:30am
Perfidious Albion
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Escape from the time bandits..

After being kidnapped by time bandits and taken to Fema Camp 16 brave Kitty has allegedly escaped. After several weeks struggle finally fooling the guards disguised as an armour plated fish brave Kitty is now struggling fighting prehistoric monsters and floating iced donuts. Last seen moving alone through the thick jungle back towards civilization and the PM love train.

artwork: Eric Joyner - "Catfish", 2011 - Oil on canvas - Courtesy Corey Helford Gallery On view in "Eric Joyner: “It’s a Jungle Out There” until February 8th.

Humble newbie listening and learning. A lemming doesn't last long these days..
Sun, Jan 22, 2012 - 10:01am (Reply to #15669)
pailin
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Perfidious Albion

Perfidious Albion wrote:

artwork: Eric Joyner - "Catfish", 2011 - Oil on canvas - Courtesy Corey Helford Gallery On view in "Eric Joyner: “It’s a Jungle Out There” until February 8th.

NICE. I love Joyner's work. Laziness cost me getting in early when paintings were $800 about 7-8 yrs back.

To the intelligent man or woman, life appears infinitely mysterious, but the stupid have an answer for everything. -Edward Abbey
Sun, Jan 22, 2012 - 10:28am
Rico
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This is the best article I've

This is the best article I've read in weeks--a first-rate piece of work, so different from the usual internet "experts". Work out for yourselves what the PM implications are.

https://www.zerohedge.com/news/subordination-101-walkthru-sovereign-bond...

Sun, Jan 22, 2012 - 12:26pm
atlee
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Agreed Rico I second that

Agreed Ricoyes

I second that recommendation. But bring your lunch with you and be prepared to spend some time and pay attention.

It is not light reading but well worth the time. IMO.

I had to rejuvenate some brain cells I burned last night and reread certain parts more than once! LOL!

Sun, Jan 22, 2012 - 3:37pm
tonym9
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Whoa...print it out, grab a

Whoa...print it out, grab a pen, make some notes. Damn good article. Will need to re-read it later.

We do live in very interesting times.

Best reality show on the planet.

"No! Try not. Do, or do not. There is no try." -Yoda Levitation will levitate until levitation doesn't levitate. Rates be the key matey.
Sun, Jan 22, 2012 - 7:14pm (Reply to #15673)
D E
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And...They're Off

€ looked ugly early, but coming back now. WTI dropped to 97.50, copper down, silver &gold down just a bit. Looks as if Hercules did not clean out the stables this weekend; will remain on his to-do list.

Sun, Jan 22, 2012 - 8:04pm
ranger7
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My plan for tomorrow

This is potentially a really chaotic week ahead. My plan is to use call options on SLV to bet on a silver bull market. My thinking is the move up on Friday broke thru the trendline of Oct-Dec lows, currently near $31.5 (SLV=30.6). The EURO also made a significant move up on Thursday.

Tomorrow at about 9am EST, if Kitco Ag is in the $31.5-32 range, I'm going to place orders to buy the SLV JLY 35 Calls at $2.80 or better. If filled, I'll hold until the Friday SLV low (29.59) is broken. If not filled, I will still be looking to buy as long as the Ag=$31.5 price isn't breached.

I would like comments from those experienced in trading options on SLV. But not so much on comments on whether to trade paper metals.

And by comments I mean, whether the month or strike is optimal.

Disclosure: I'm long metal and SLV and APR 30 Calls on SLV. Also just bought FXE to play the EURO.

Good trading to all

Sun, Jan 22, 2012 - 9:58pm (Reply to #15674)
D E
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And...They're On!

All reversed. WTI back over 98. Silver & Gold looking strong.

Buying Mar WTI
Sun, Jan 22, 2012 - 11:31pm (Reply to #15671)
BlackHawk
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Best article, yes

and very sobering when it's finally understood by the bleating masses. Must find more vodka now...

https://www.youtube.com/watch?v=Z9hMtVWN91M

Mon, Jan 23, 2012 - 12:13am (Reply to #15675)
plunder
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ranger: that's fine if you

ranger: that's fine if you want to make a bet on a silver bull market with SLV calls. There's no way to advise if the strike and expiration are 'optimal' because that all depends on your risk tolerance and what you think will happen between now and July (magnitude and timing of move). It's basically the same bet that you already have, just medium risk. Your SLV shares are lowest risk, April 30 calls would be highest and July 35s would be in between.

Example: say that you think SLV will make a reasonably orderly $10 climb between now and July. Then you could buy your July 35 calls, keep your moneyed April 30s, and sell (write) some February calls at a strike in-between (say $33). That locks in profits, if it's not to $33 by February then you keep the premium. If it goes above 33 before Feb. expiration, then just sell the april 30s and buy back the feb calls (close the spread) for $300 apiece plus remaining april premium.

IF you think it's going up a couple of dollars soon then you could just add to your april calls. There are a million things that you could do, only you can answer whether it's 'optimal.'

By the way, july35SLV calls closed at 2.07 ask , delta 40. a $2.80 bid will get hit for sure unless SLV goes up a couple dollars overnight. Maybe just set a market order with a condition of SLV <$31.50 if your trading platform allows it, sounds like that's what you want to do anyways.

Mon, Jan 23, 2012 - 12:48am
sixdollarsilver
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booking more long profits on PMs

@ 1672/32.48

I think they could still run to 1680/33 so I'm leaving a little with stops under today's lows.

Still holding euro and NG because... I like pain I guess - what an idiot.

No, seriously, I see euro resuming upwards after a little hang around 1.28-1.29. NG, what can I say? Closer to bottom than top perhaps only because it can't go beyond 0. Yes, 0. Although didn't the baltic dry index go negative in 2008, meaning shippers were in theory paying people to ship stuff?? That would be fun ;)

Surges like Friday through today are why I play like I do (*overtrade*). I feel reasonably confident picking inflection points, but not how far they'll run after they turn. Seeing "the big one" coming is tough day to day. I'm much more often than not in position when they go and my limits are usually A LOT further from price than my stops. Small losses, large gains is the name of the game. That is unless you're just stacking and waiting.

I'll probably get my ass handed to me sometime this week, but at least it'll only be a small fraction of what I got off the shorts these last few days.

Best of luck dudes and dudettes.

Mon, Jan 23, 2012 - 2:05am
Titus Andronicus
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Gold time-of-day trade

I'm trying to print out some charts, but I loaded my spreadsheets with so much data that my gif generation procedure seems to be super slow for now. Hopefully I'll fix it by tonight.

In the mean time I wanted to say something about gold averaged over just the last two weeks.

Based on past data for the full year of 2011, the 5am-10am short and 2:30pm-5am long would have been very close to an ideal trading strategy for the year.

But based on the data so far available for 2012, the best strategy would have been:

1) short 2:30am - 9:30am

2) long 9:30am - 2:30am.

I have not figured out a way to reconcile averages based on recent but smaller samples with averages based on less-recent larger samples. But I guess the original long/short times I proposed (or something close to that) are going to be a workable pattern for the next few months. One part of the time-of-day strategy is to just do it and let the automatic trades generate (hopefully) profits for you. (I also guess that the times proposed by some others on this thread would be good too.)

But really, a simple buy and hold strategy has done very well so far this year. That's what I've been doing so far and it has worked very well.

Having said all this, I don't think I'm going to go short tonight. I really do agree with Turd about the direction of gold and silver. Probably I will lighten my long at 2:30am and re-buy at 2:30pm tomorrow, but I'm not even sure about that.

Mon, Jan 23, 2012 - 5:21am
pailin
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5 am sold gold

1673.49

That one was green from Friday afternoon buy. Will buy back position 2:30 pm, hopefully lower...of course :)

@Titus - even if the timing isn't always perfect or generates red from time to time, I think it still takes you out of the long market during the "worst time"...London hours. London effs PM bugs plain and simple. Why be their prey? I don't think I'll be playing the short half of the strategy, just the long 2:30 pm - 5 am. Short just doesn't feel right. At least for a while. I'm also toying with putting on a partial position (I'm playing with more than "one" right now) at 10 am (vs. covering, since I won't be short) and then more to "top off" at 2:30 pm. This way I'd participate in that flat but slightly down zone and also capture some of the windfall profits on hot days (like Friday). Haven't done that yet, maybe tomorrow for Turnaround Tuesday? Anyway, being out during London hours is psychologically comforting even if other strategies suggest staying long is best. Might be worth the peace of mind to leave some profits on the table?

Good work you've been doing, really appreciate it!

To the intelligent man or woman, life appears infinitely mysterious, but the stupid have an answer for everything. -Edward Abbey
Mon, Jan 23, 2012 - 6:02am (Reply to #15681)
D E
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WTI

Caught a nice bid after Euros announce Iranian sanctions to phase in. Knowing this is more bark than bite, sold into rally. All flat now.

Long Euro would have been nice, but at least I wasn't short it this time...

Mon, Jan 23, 2012 - 8:10am (Reply to #15678)
ranger7
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Thanks Plunder I see I got

Thanks Plunder

I see I got the price wrong. It is -25 cents from Friday, so $1.80. I must have used the APR30 close of 3.05 to get $2.80. Equiv to SLV at ~$30.50.

Mon, Jan 23, 2012 - 8:54am
Rico
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The current pullback in the

The current pullback in the PMs this AM is the healthiest thing that could have happened, after Friday. It's consolidation, and gives the fence-sitters yet another opportunity to get in the game.

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