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Sean Weston
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Individual investor with a background in accounting and economics. Typically very long-term oriented with an extremely low turnover in my portfolio during a given year. I have been managing my own portfolio since 2007, which is concentrated and non-diversified. Currently long WFC, UNP, MA, IBM,... More
  • Big Down Day For Silver 2 comments
    May 2, 2011 4:23 PM | about stocks: SLV
    SLV, the ISHARES silver ETF finished the afternoon down 8.72%, in heavy trading with volume nearly 3 times above the normal level. This comes after SLV finished the last few trading days being the most heavily traded ETF, overtaking even SPY, the index fund which tracks the S+P 500.

    For a niche fund, this is quite an accomplishment. It is also indicative of an investment which has long ago passed the phase which moved it into the supremely fashionable and much talked about asset it is today.

    A large number of intraday traders are among those piling in to the ETF, indicating high speculation. The trading volume seen among this portion of investors is not shared by institutional investors, a sign the "smart money" is not following along.

    Time will tell if this is the beginning of the end for the exponential growth seen in silver. There does seem to be a growing dissention within the investment community lately regarding Silver.
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  • norrisboat
    , contributor
    Comment (1) | Send Message
     
    In the article it mentions "a large number of intraday traders" are buying and "smart money" is not. What volume sizes or trends indicate this? Are there any other indicators that "smart money' is buying or selling?
    2 May 2011, 04:33 PM Reply Like
  • Sean Weston
    , contributor
    Comments (57) | Send Message
     
    Author’s reply » Hi Norrisboat. I actually made a mistake I realized and was coming back to edit when I saw your post. It should have read "large number of intraday traders are piling into silver", not explicitly the SLV etf.

     

    I am getting this from the large increase seen in volume with leveraged and also inverse ETFs, which are typically very speculative with a high amount of intraday traders.

     

    For a clue that the smart money is not following, even with the torrid pace of activity, the number of shares outstanding with SLV has increased only marginally.
    2 May 2011, 04:55 PM Reply Like
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