Week 15.1 What went wrong with me?
I knew that according to technical indicator, the RSI-Relative Strength Index for SLV (silver) is already more than 70 which indicated an over brought condition since Early April 2011. I was thinking the market is manipulated thus RSI-70 may not make sense this time especially it was above 70 for almost 1 month. In addition to that, I was making a bet that COMEX will default soon (it never did).
My mistake is I did not analyze the increase number of long spectators in COMEX market. Once, CME raise the margin call by 5 times within 8 days, the price drop from USD49+ to USD33+. As the saying goes, what you earn in 10 previous deals, you lost it in 1 single deal. That is your tuition fee.
At the same time, customers are asking for more goods that what I can deliver. Usual lah, price rise everybody want to buy. Price fall, nobody interested. So I was thinking if I double my purchase, I will double my return. That the CME margin call came into picture some of my customer back off. Then later on the day, I cut my lost by selling some at a lower price. Things will have been better, if I stick to my trading rule and not greed.
Who goes wrong?
When some of my customer who are very experience in investing. They have invested in stock, unit trust, property and explored many other ventures before. Some are gold smith as well. Do keep in touch with this blog, will tell you more when I have time to write. They also brought at peak prices from me. Normally, they don’t listen to me lah cause they are big brother mah.
One of them said when it was at USD46/oz, better get some before it burst.
Well, most of them are not worry and understand that the silver market is manipulated. Basically they are long term investor and strong hoarder. Tell me who can predict the CME margin raise? JPMorgan lah off course.
Well, if you look at the daily chart RSI, it may be a good time to buy some now. Since I’m involved in trading physical I look at daily chart. If you are investor, you may want to look at weekly chart. Just average out your purchase over a period of time then you will be fine. I doubt whether we will be able to reach RSI < 30 back in 2008 where JP Morgan big time shorted the silver market.
What next?
Will the price goes down again below 33?
It can go down to 33 if CME do a few more round of margin raise. If not it will go up again. Until what price? This one I’m not sure. At the moment, most of the physical vendors already run out of silver for sale.
this is wonderful buying time, but if you are long time investors, this is almost as common as a textbook. I stopped believing it when daily volume hits 1.2 bn ounces while yearly volume only 700mn ounces, I know it will crash soon. Accident waiting to happen.
ReplyDeleteto win in silver market, US dollar must collapse first. (they cannot print anymore)
this is not just comex you are up to or jpmorgan or hsbc, these are all backed by federal reserves. now at 33-38, the hedge fund long (paulson etc) are fighting with federal reserves
however a lie is a lie, it will still fail eventually, unless china decided to continue short selling it, which doesnt make sense because running out of physical bullion.
buy some once a while is the right way, to some people 1-2 ounces is once a while, to some people 10-20, 100-200 ounces is considered ok once a while. but silver market is still in backwardation ... selling higher than spot price due to tight physical supply, so I dont think can get cheap silver easily.
ReplyDeletethanks for your comment tan.
ReplyDeleteI think those who made order and then cancelled order are the worst type, unprofessional and you almost end up being blamed by them if something went wrong. Even though as businessman we need to serve everyone, but this type of customer no win-win situation at all.
ReplyDeletemaybe can make the ebay must pay before you can order, but that only for paypal, like what some ebayers did. less hassle for you.
well, price drop > USD10/ that is RM30 sure they will back off lah. Just that next time I won;t deal with them anymore lah.
ReplyDelete