Loading ...Backwardation
Backwardation in the monetary metals is pretty rare. We have been seeing day after day this condition in silver and gold. You can compare the futures price of silver or gold to the spot price and see the backwardation. It is where the futures price is either at the spot price or below it. The last time this occurred was in March 2020. Late 2015 was the period before that. Before that it was early 2011. Each of these periods preceded huge runs in the precious metals.
THUMBS UP!
Most of my miner charts look abysmal and my system indicators are also strongly pointing down for the metals and miners. Most of wall street is down grading the miners just before they announce spectacular results in the next few weeks even though the miners are producing more free cash flow than any other group.
Why is that?
Sorry to hear about your penalty box situation. However there is a silver lining. It means that you cannot buy on margin. That means you are guaranteed to survive any wipeout and that means you will profit from the bull market. I know so many people who have not profited from a bull run because of margin. Peace.
Thanks Noman for your encouragement, but the reason I am in the penalty box is because I have no stinkin’ margin account and I will not go there. I am in the box because I bought then sold a stock with unsettled cash therefore cutting the brokerage out of some margin interest. I will go to plan B and keep a larger settled cash balance to trade with. What is really aggravating me is I sold all my SKLZ at the then all time of $32, Wed. to raise cash the day before the NFL announcement. It traded as high as $46.30 today. Oh well I’ll get over it.
I bought Penn at $6 and sold at $12…. As traders we are always wrong..
Well to be fair, in many of those instances, silver dropped substantially just prior to taking off. 2015 and 2020 being examples.
In 2011 the most pronounced period of backwardation was Feb 2011. Silver ran straight up from there to 49.50 on April 30th. In 2015 the backwardation was most evident in Oct and Silver stayed pegged to $15 till end of year when rally started. Same for 2020. I track it real time and have records going way back.
To be fair Silver did take a hit in Dec 2015 and hence my soap box on margin.
I cannot believe I am going into the weekend with a position. Traders never do that…
maybe you like
https://summerhavenindex.com/sdci_methodology/
That’s good news! GDX, GDXJ, WPM, all had the chance to really break down if those H&S are valid but held on. Silver looks decent but might have to consolidate a bit. Gold looks to be rolling over. Hmmmmmm