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Silver Strike

Written By Christian DeHaemer

Posted March 5, 2013

Since the start of this year, my Options Trading Pit portfolio is up 97.12% in total.

You can see it yourself in black, white, and green:


Buy Date

Buy Price

Sell Date

Sell Price


Rentech Nitrogen Partners April 47.50 Calls






Peabody Energy March 27 Calls






ABG Feb 35 Calls






Westport April 29 Calls






Toll Brothers June 33 Put






I’ve been able to make these kinds of amazing returns by betting against the trend.

I do this using a specific set of little-known turnaround signals. In fact, I am the only person I know who uses this exact system to place large, highly-leveraged, short-term bets.

As you can, see my tactics have been 100% effective this year.

Last week I turned my attention to another sector that had been beaten down: silver.

My signal was flashing green last Thursday when I pulled the trigger…

Here is the letter put out to readers of Options Trading Pit:

Strange things are afoot in the metal markets…

There is an odd divergence between physical demand and the falling price of silver and gold. Gold is down to $1,577 per ounce. Silver is down to $28.40 per ounce. At the same time, the U.S. Mint has seen the largest demand for physical silver coins ever in February.

On top of this, falling prices are causing the Central Fund of Canada (AMEX: CEF) to approach a discount to its underlying assets. CEF is a closed-end fund. It now has a market cap of US$4.97 billion and a share price of $19.49. This is just 1% over the price of its combined silver and gold portfolio. CEF usually trades at a 2% to 4% premium to its physical gold and silver assets. CEF hasn’t spent much time below its NAV since the metal market bottom of 2001.

The mainstream pundits coupled with Bernanke at the Fed would have you believe the long bull market in gold and silver is over, that there will be a great rotation into equities… They’re wrong.

Recent trouble in housing and the retail sectors suggest equities will continue to be a hard slog. Money printing and higher taxes won’t bring the consumer back.

slv feb 28

On the ten-year chart, you can see it’s a pennant formation that is at the turning point:

 slv ten year

Silver is at a tipping point. It could sell off below $26, at which point it’s going to $19… or it could break out to the upside, at which point it will fill that gap at $38 by the end of the year.

I then put out a specific, highly-leveraged long-term play on silver.

In two trading days, that trade was up 11.78%.

If my signal holds true (we do have early confirmation), it will be up 357% by November 2013.

All the best,

Christian DeHaemer Signature

Christian DeHaemer

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Christian is the founder of Bull and Bust Report and an editor at Energy and Capital. For more on Christian, see his editor’s page.