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Buy Silver Sell Spanish Equities

Tyler Durden's picture




 

From Nic Lenoir

Buy silver sell Spanish equities

Following my thoughts on the fireworks going off everywhere in emerging markets, if you are not short emerging yet (EEM is a great proxy. Look at Bovespa in Brazil or TUR the Turkish ETF, it is all looking horrible and about to get completely decimated), you can still buy silver and sell Spanish equities. A few weeks ago when silver had broken the 50-dma I had pointed that it should retrace towards 25.80/26.50. We came right around those levels and caught a huge bid today. Confirmation by breaking out of the bearish downtrend channel since the recent highs would point towards new highs. Meanwhile the IBEX has completed a consolidation wedge and held resistance at 11,000. As a long as we stay below the afore-mentioned resistance the next stop on the way down is 9,600.


Put your helmets on, it could get very very choppy soon.

Nic

 

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Fri, 01/28/2011 - 17:59 | 914618 Motorhead
Motorhead's picture

Que chingada!

Fri, 01/28/2011 - 19:07 | 914826 txapela
txapela's picture

that's mexico. retard.

Sat, 01/29/2011 - 03:42 | 915668 Motorhead
Motorhead's picture

Wow, I'm a retard. Coming from you, that really means something. I'm impressed.

Sat, 01/29/2011 - 08:15 | 915734 hugovanderbubble
hugovanderbubble's picture

MotorHead,

 

First Point- I dont have nothing against you and neither to Mexicans slang and culture, but " Que chingada" as Txapela says its a typical mexican´s word.

Spain has big problems, tough times coming next years, but hope we can get over them with new Government measures and Strategical new issues

 

Please in order to preserve the good manners in the forum, lets avoid this kind of "debates".

 

Enjoy weekend,

 

Fri, 01/28/2011 - 18:03 | 914628 NOTW777
NOTW777's picture

agree. i had 38.2 @ 25.96

some silver equities appear to have bottomed several days ago

PSLV looking to turn

Fri, 01/28/2011 - 18:06 | 914635 Temporalist
Temporalist's picture

SVM up 5.73% today

Fri, 01/28/2011 - 18:12 | 914648 NOTW777
NOTW777's picture

nice. some EOD buying to boot

tues might have been the near term low

Fri, 01/28/2011 - 18:06 | 914637 NOTW777
NOTW777's picture

look @ SLW, UXG and SIL e.g.

Fri, 01/28/2011 - 18:09 | 914642 99er
Fri, 01/28/2011 - 18:25 | 914687 NOTW777
NOTW777's picture

wheat appears to be retesting ascending triangle BO

Fri, 01/28/2011 - 18:43 | 914746 aaronb17
aaronb17's picture

If you want to hedge against potential effects of dollar strength due to world instability, go long silver and short oil at about a 1/1 ratio.  In my 401k I'm long pslv and long DTO at a 2/1 ratio.  Reasons are backward and forward looking.

Interestingly, oil and silver really seem to follow each other pretty closely these days in the short term.   The double-leveraged etf gives a massive pop whenever oil (and thus silver) plummets due to dollar strength.  It also hasn't seemed as subject to the long-term decay that has plagued so many inverse etfs (don't ask me why, I'm just an observer).   This won't protect you from the JPM silver manipulators, but it does protect you from dollar surges/liquidity crunches.

Like a lot of folks, I think silver stands to gain huge if the dollar tanks.  Oil will gain as well, but there are more supply and demand issues limiting its upward range.  This ratio helps avoid short-term volatility yet still captures a lot of value from a doubling or tripling of silver or a 2008-style commodities crash that crushes silver and oil (dto was up 600% in the commodities crash of 2008/2009).

Fri, 01/28/2011 - 19:20 | 914862 Freddie
Freddie's picture

Short oil!  The Suez Canal may be closed and the middle east govts are going to go up in smoke.

Sat, 01/29/2011 - 10:15 | 915806 dough eating squid
dough eating squid's picture

Should be bullish for oil

Fri, 01/28/2011 - 18:51 | 914773 goldsaver
goldsaver's picture

Has anyone taken a look at the 1Kilo copper bars? They are dirt cheap and a good way to introduce someone to metals. I'm thinking of ordering a few for presents, like I did with silver ASEs.

Fri, 01/28/2011 - 19:05 | 914816 economists_do_i...
economists_do_it_with_models's picture

1982 & prior pennies are worth almost 3 cents each.  Perhaps you should make your own bars.  Just kidding about the whole destorying currency thing.

Fri, 01/28/2011 - 20:17 | 915008 Triggernometry
Triggernometry's picture

You're not kidding about that, neither am I. I've been stashing pre-1982 pennies for years, their melt value crossed 2 cents a while back. Nickels are good too, fetching almost 7 cents. Its free money as far as I see it, pre-1982 pennies are the best priced copper out there. To be clear, melting money is currently illegal and I would advise against it, sentences run around ten years; but there's nothing wrong with accumulating it until currency collapse, at which point its all fair game.

Fri, 01/28/2011 - 23:46 | 915387 Dr. Gonzo
Dr. Gonzo's picture

I have a  big pickle jar full of old copper pennies. It's copper dude. How could you not want to save copper pennies? My Grandpa picked out the silver change back in the 60's. I'm just carrying on the tradition. My son will pick out the zinc pennies from the future steel pennies. His son will pick out the steel pennies from the plastic ones. I don't know what my grandkids will be able to scrounge by then.

Fri, 01/28/2011 - 20:19 | 915014 dark pools of soros
dark pools of soros's picture

technically you could melt a block of copper and then pour that on some pre 82s to make bigger bars and not actually destroy any of them...  same as losing them in your couch

Fri, 01/28/2011 - 18:52 | 914777 economists_do_i...
economists_do_it_with_models's picture

I respectfully disagree with your stance on emerging market equities.

EEM:SPY is quite UNDER-valued relative to other foreign equities.

There are several other things that factor in as well...

1) Natural rebound/bounce back after a big down day

2) Next trading day = [Mutual fund] Monday [melt up]

3) The following day is the 1st of the month -- 99.9% chance of it being an up day.

4) Egypt may see a speedy return to calm + peace with the White House pushing hard for a resolution since it is a bit of a PR disaster for them with that whole 'made in the U.S.A.' tear gas can ordeal.

5) EEM:USO had a day almost 3x as large as the 2nd biggest down day over the last 52 weeks today.  WOW.

6) Relative to it's own EMA(5), the current discount exceeds/equals the biggest extremes over the last year.  Every time those events happened, the stock exploded upward.

After 2-2-11, all hell might break loose.  That would be a better entry date for a short position.  EEM:$BDI certainly indicates a correction is likely at some point.  I see a quick pop to the upside between now and then.

= = =

I agree that energy & metals look OK right now.

= = =

As far as world conflicts/drama, I think an event in South Korea is under-estimated.  Before the drop today, EWY was at a 3+yr high.  Weren't they just on the BRINK OF WAR?!?  By comparison, in Egypt, the protestors were shaking hands with the tank drivers -- while EGPT is like -25% from it's recent high.  Korean conflict = 'Nuclear Swan' (?).

Sat, 01/29/2011 - 10:07 | 915799 Snidley Whipsnae
Snidley Whipsnae's picture

I heard no comments on the internet or from main stream media regarding a coming Egyptian revolution. I certainly didn't see it coming.

I conclude that the blow up in Egypt IS a black swan. And, spillover into the oil producing states is certainly not out of the question.

Anyone that still believes that the US can continue to print fiat and export the inflation should take the earth shaking in the Mid East as a warning that there is indeed a limit to how much 'QE' is possible.

Not to mention that the lame azz ratings agencies are continuing to issue lame azz warnings on US credit. Of course the downgrade will come only after a currency collapse or a decision by Ben that it's time to stop the QE lunacy...How likely is that?

 

Fri, 01/28/2011 - 22:32 | 915286 RobotTrader
RobotTrader's picture

Many Asian closed end ETF's are selling for huge discounts to NAV.

Examples include CHN and IFN.

Go to ETF Connect and you can do several scans, the most undervalued ones are emerging market based.

Sat, 01/29/2011 - 03:00 | 915513 Grand Supercycle
Grand Supercycle's picture

My earlier warnings of a Gold + Silver correction confirmed.

Gold + Silver daily chart has gone sideways while a right hand shoulder develops on the possble head and shoulders pattern on the weekly chart.

Weekly indicators still warn of significant Gold and Silver downside.

 

http://stockmarket618.wordpress.com

Sat, 01/29/2011 - 07:40 | 915725 hugovanderbubble
hugovanderbubble's picture

+1

I agree in part with each both

Nic Lenoir and Economist do I

 

The biggest problem for shorting spain is China Investment Corporation is buying with SAFE ( European Bonds ) and stakes with others Sovereign Wealth Funds (for example Temasek in Telefonica TEF SM EQUITY)...So Spain is recieving Support by China /Japan and Germany. Very Difficult to short it.

Ive been trading Spain for 11 years with a nice track record (always with absolute return strategies) but with this kind of market completly manipulated by Central Banks, be careful with Shorting an Emerging Market like Spain its now...(Irrational Behaviour).

Just track the CDS, The 10yrs Bond spread vs German 10yrs, ...Just in Case of massive Real Estate Fraud i will agree with u that Spain is a super Sell cos the default is evident, but ITS TOO BIG TO FAIL...dont know if u catch what i mean...

Regards

Hugo,

Sat, 01/29/2011 - 09:54 | 915782 Snidley Whipsnae
Snidley Whipsnae's picture

Sprott says silver to $50 and gold to $2150 this year.

I would rather be holding this stuff than anyone's fiat...or, any paper of any sort.

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/1/28_Eric_Sprott_-_Expect_$50_Silver,_Gold_Possibly_$2,150_by_Spring.html

Sat, 01/29/2011 - 09:57 | 915787 Snidley Whipsnae
Snidley Whipsnae's picture

St Louis Fed on a possible return to a gold standard.

"The classical gold standard: Some lessons for today"

Warning...PDF

http://research.stlouisfed.org/publications/review/81/05/Classical_May1981.pdf

Sat, 01/29/2011 - 12:15 | 915996 Tense INDIAN
Tense INDIAN's picture

Sell EM ...and i think Sell EMs it is...i think i completely counted the waves wrong last time when time when i thought we were in an expanding diagonal in 5th wave ....the Difty jhas travelled too far below too fast to be in any uptrend...so had to completley recount the waves......see below::

 

http://markettechnicals-jonak.blogspot.com/

 

 

well I am completely new to this technicals....only abt 2 months old....so please share your opinions....thanks....

 

 

 

 

Sat, 01/29/2011 - 13:16 | 916137 Highrev
Highrev's picture

That's a good look at the IBEX.

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