Saturday, January 02, 2010

Is Shorting Silver still a good idea?

I thought I would update my recent postings with Silver and using its ETF Ultra Short, symbol ZSL. I have shown above the most recent 6 month chart on ZSL and also the 6 month chart on the price of Silver. I got into this trade at $4.24/share and later bought more at $4.54. Current price as of the close of Friday was $4.78/share. You can see from the chart of ZSL that it is now over its 50 day Moving Average line.

In the 10 year chart below of Silver, you can see that the normal price point for Silver is much lower. That in part is the reason I am using ZSL as a trade, because I believe Silver will go back to a more normal range of $12=$13/ounce, compared to where it is now around $17/ounce.

I think this is still a good trade and in the coming weeks of January and February, it will prove profitable. I said in earlier posts I see an unsure market until earnings come out in the beginning of February and coincidentally I see the action the Fed will take to start to allow the economy to make it on its own, causing a drop in Silver in the short term. However long term I see both Gold and Silver increasing in value. This trade is good for only 3 months I suspect.

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Blogger Cheryl said...

I have been following Ted Butler for the last 8 years and all he says is coming to pass. Last summer the Frank-Dodd act was signed by the President to set position limits of finite commodities. The shorting of silver by the big 4 banks to the tune of 40% world production is a manipulation that is soon to end. I believe silver will never return to $13, I think you may be missing a great opportunity to buy and hold physical silver.
There are 5-6 reasons silver could shoot the moon. Any 1 of them alone could cause $100 silver. and 5-6 things are happening at ONCE! Pick a number and double it! I believe in holding real physical silver!!
Please read all you can on Ted Butler. Investment has a Great Newsletter to follow and a way to purchase silver

Best Wishes, CS in CA

8:27 AM  

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