Tuesday, March 1, 2011

March 1st Silver, new 30 year high

3 month chart of the World Silver Index.  Silver produced a new 30 year high today of $34.76 an ounce.

Silver is producing higher highs and higher lows since Jan 28th low of $26.30. Bullish
Silver is trading above the short, mid and long term moving averages. Bullish
MACD histogram is trading in the upper band. Bullish
Stochastics lost the embedded status on 2/24, but the K line has crossed over the D line and is heading back over 80. Bullish.
Silver is trading near the upper bollinger band. Bullish/Neutral - for traders.

Short term - Bullish
Medium term - Bullish
Long term - Bullish

The Gold / Silver ratio continues to drop and IF it should continue at this rate, it may be around the 30 level at the end of the year.  If Gold rises to $1600, a 30/1 ratio would put Silver around the $53 area.

You can make some decent $$$ just by investing in the Silver market with a little timing.  Some PM investors will only purchase the physical metal and that is a great way to start and is a good way to preserve your capital from inflation. But that is it, a hedge against inflation.

If you want higher returns, you'll need to leverage your money. (The risk is also much higher).  You can leverage your money with Silver miners or the double long ETF AGQ which returned ~160% last year.

I got into this trade near the bottom of the Silver correction in late Jan.  This trade was made on Feb 2nd, about a month ago.

For Silver miners, you can get a comprehensive list in the GlobalX ETF SIL. (Google them) They have all of the major Silver miners in the fund.  SLW, SVM, AU, EXK, PAAS, CDE, SSRI, MVG, HL to name a few.  
March has typically been a down month for both Gold and Silver, we will just need to sit back and watch if this seasonal trend will continue this year.  With all of the turmoil in the middle east, a flock to the PM's may continue this month.

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