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Should you buy SLV the silver
by Peter Degraaf
Charts presented in this report are courtesy
Featured is the daily bar chart for SLV. Price has
risen for five days, but volume has not yet supported the rise. This lack of
volume could be because more and more people are becoming aware of the fact that
JPMorgan (one of the bullion banks that is short a large amount of silver), is a
custodian of SLV. As people begin to distrust the integrity (justified or not)
of SLV, they could very well make a decision to avoid buying into SLV. This
would show up in a slow-down in volume, even as price rises to keep up with
silver bullion. The RSI and MACD are positive in this chart and a breakout at
the blue arrow along with an increase in volume will be bullish for SLV and will
indicate that there are still enough people interested in SLV to keep it rising.
Confirmation of the theory that people are beginning to distrust SLV would first
show up in a comparative performance with other, similar silver investments,
where other investments outperform SLV. Some of these are shown below.
Featured is the index that compares the SLV to the
Horizon silver ETF that trades on the TSX. Clearly the HZU has outperformed the
SLV over the past few months.
Likewise the comparison between SLV and AGQ the silver ETF with double leverage
shows AGQ to be the better performer. (The double leverage has something to with
this outperforming, but not to this extent).
Featured is the index that compares SLV to the
Sprott silver trust. Obviously we do not have a lot of data to go with, but the
short-term trend appears to favor PSLV.
The conclusion we draw from the above charts is that
regardless of whether traders and investors believe in the integrity of SLV the
silver ETF, there are competitive investments in the same sector that are
outperforming SLV. The ‘proof is in the pudding’, as can be seen in the next
Featured is the index that compares SLV to silver
bullion. Although the descent is slow, it nevertheless shows SLV to be losing
ground to silver itself.
In summary, and despite the fact that other
investment vehicles are outperforming SLV, in the event that price breaks out at
the blue arrow in the SLV chart above, on increased volume, then those who own
shares in SLV will continue to profit, but those who invest in the alternatives
can expect to do even better, and without having to worry about the JPMorgan
influence at SLV. (As most of you know, JPMorgan has at least 14 law suits
pending against it for illegally manipulating the silver price. This bank is
still carrying a very large large ‘short silver’ position on its books).
DISCLAIMER: Please do your own due diligence.
Investing involves taking risks. I am NOT responsible for your trading
Happy trading! Peter Degraaf
Peter Degraaf is an online stock trader with over
50 years of investing experience. He publishes a daily and weekly report for his
many subscribers. For a sample copy send him an E-mail at
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