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Kenneth D. Worth

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  • A Dead Cat Bounce in Silver [View article]
    Just the steadiness of the decline was starting to look like a crash. Initially, I thought there would be some good rallies on the way down as is usually the case in post-mania sell-offs. All we got, though, was a quick move back up to 38 from 33, and we have reversed nearly all of that in just a few days. The counter-trend rally is starting to look more and more like a bounce of the 25th story ledge after all. : )
    May 17 04:30 PM | Likes Like |Link to Comment
  • Silver and Oil Moving in Tandem: Large Hedge Fund Liquidation? [View article]
    Over the past six years there has been a overall pattern of decreased oil consumption in the OECD and increased consumption of oil in the developing world including China and OPEC. Overall, supply has been largely flat, up only about .6% per year (IEA, all liquids). Net oil exports available to importing nations have actually been falling during that time period.
    May 12 02:40 PM | Likes Like |Link to Comment
  • A Dead Cat Bounce in Silver [View article]
    SLV has now started to rally significantly, up as high as 37 today. At this point, the downward momentum from 48 to 34 has weakened enough for me to exit the short position. I think we will probably get another run down to 30, but as a along term silver bull I am content to take my hedge off at this point.
    May 10 01:25 PM | 1 Like Like |Link to Comment
  • Not Yet Time to Sell Oil [View article]
    Well, if Brent sells down much lower, I will be surprised. I was surprised at the sell-off today, but really at this point we need either additional supply or a global recession to keep the price moving lower, and we do not yet seem to have either one.
    May 6 07:11 PM | Likes Like |Link to Comment
  • Hold on to Those Silver Puts [View article]
    I really like your strategy as there is a possibility that the bulls could stage a rally here that will benefit your calls while your $24 puts are so far out of the money that they only pay out if the crash continues. The dynamics are inherently unstable, and yours is a very nice play on it.
    May 6 03:42 PM | Likes Like |Link to Comment
  • Hold on to Those Silver Puts [View article]
    As they say, "Don't catch a falling knife." As a matter of technical trading, one should wait for at least one day in which the closing price is higher than the previous close. That would give some kind of signal that we might be at a bottom.
    May 5 03:56 PM | 3 Likes Like |Link to Comment
  • Why Silver Is Correcting [View article]
    The long term picture is this: if silver gains 20% per year over the next decade as it had done over the last (virtually all of it in the last three years, lol!) then it will be one of the greatest investment opportunities of the last thousand years, up there with Japanese equities in the 70's and 80's, US stocks in the 80's and 90's, yada, yada, yada.

    I think it will.

    Projected price: 2021: $241 an ounce.

    Be patient. We'll get there.
    May 4 08:57 PM | 1 Like Like |Link to Comment
  • Why Silver Is Correcting [View article]
    Short term the USD could see a recovery rally due to the ending of QE2 in June, but longer term the world needs a much lower dollar so that US exports can be competitive again. Other central banks will of course resist this to support their own exports, but to do so they must hold dollars, which they really don't want to do. Ultimately, they will have to let the dollar fall. They know that soon we will have QE3, QE4, etc. until the massive US debt problem is inflated away.

    As a short term trade for the summer, maybe, but longer term I would stay far, far away from UUP.
    May 4 12:04 PM | 3 Likes Like |Link to Comment
  • Silver Market Appears Massively Overbought [View article]
    But that is precisely why technical analysis often works well; price charts are very often the direct expressions of traders' emotions.
    May 3 06:28 PM | Likes Like |Link to Comment
  • Silver Market Appears Massively Overbought [View article]
    July 45 put option on SLV purchased at the time of the initial recommendation for $2.91 a share closed today at 8.17. That is a 180% return in just three trading days.

    Closing out the July 50 call at $1.50 resulted in a loss of 1.28 a share, reducing the total return to +21% over three trading days thusfar.

    This correction should take us down to at least $30 an ounce and could do so fairly quickly. That would be a good point at which to close out the puts and get long again.
    May 3 06:23 PM | 1 Like Like |Link to Comment
  • Silver: Long? Short? Yes! [View article]
    Typically, since both the futures contract and SLV can be converted into physical metal by institutional traders, all three prices should track one another fairly closely. (SLV will slightly underperform physical metal over the longer term due to it's very small management fee.) In the frantic trading of the past few days, there was a clear divergence between the futures market price and the ETF price. This price differential is very likely now being corrected by arbitrage trades.
    Apr 30 08:00 PM | 3 Likes Like |Link to Comment
  • Not Yet Time to Sell Oil [View article]
    Cash, in the short term, but in the long term, more likely Blut und Eisen.
    Apr 30 01:26 AM | 1 Like Like |Link to Comment
  • Not Yet Time to Sell Oil [View article]
    One response to the above point, and it is a good one, is that the financial crisis was already well under way in 2008, and home prices and new home construction were already crashing. A lot of real estate jobs were disappearing anyway and with them a lot of demand for refined products. The wonder is how prices for crude oil continued to climb even after the US had entered recession in late 2007.

    One could certainly argue that the global economy is in better shape now than it was in 2008, when a financial crisis was already well underway. The worry now is over sovereign debt and the US dollar. A dollar devaluation wouldn't necessarily be bearish for the price of oil expressed in USD.
    Apr 29 12:06 PM | 2 Likes Like |Link to Comment
  • Not Yet Time to Sell Oil [View article]
    And GS has never been known to take the other side of a trade it recommended to a client.
    Apr 29 11:55 AM | 3 Likes Like |Link to Comment
  • Time to Sell Those Silver Calls [View article]
    Granate1, regarding the timing of shorting or buying puts on the cubes (, my gut sense is that the greatest downward move will come 1) after QE2 ends, and 2) after oil hits $150. So, I'm holding off on that trade at the moment, but waiting patiently for the right time to make it. Lots of data is coming in positive at this point: vehicle miles travelled, retail sales, capacity utilization, private sector jobs (See the blog: Calculated Risk for details) and the Fed is printing 100 billion dollars per month, so it's still too early to short ANYTHING!! Rule number 1: Don't fight the Fed. As true today as ever.
    Apr 21 11:52 AM | 2 Likes Like |Link to Comment