The trend channel is also a nice tool to use as a reference point. Price action in July of 2011 was the start of this huge bull-run. Depending on how your trend lines are drawn, Visa has respected the upper and lower bounds many of times. Days of note have a white oval. These days have the same or a similar pattern to what was presented yesterday. For the most part, each of these situations resulted in lower prices in the short term.

It is also interesting to note that yesterday’s volume was 30% above the 50-day average volume. Additionally, on balance volume failed to confirm a new ATH too. A target could be the middle of the bull channel displayed below, perhaps about $150 in the short term. Next week’s weekly options in combination with the regular January monthly options are pricing the $150 put calendar at $0.34, if one was inclined to get bearish next week. Other ‘options’ include buying put verticals or anything with negative deltas.

Feel free to e-mail any comments, feedback, suggestions, or general inquiries to…

Author

salernoma@mx.lakeforest.edu

At the December meeting, the FOMC announced Treasury purchases of $45 billion a month in addition to $40 billion a month of mortgage-debt purchases, which began last September.  Cash silver fell nearly 2.5 percent to $29.42 an ounce, the lowest price since August 22, and was at $29.78.  The drop in prices for the two metals has created an attractive buying opportunity.  Despite the fact that both metals are cheaper, silver may offer a greater reward than gold in 2013.  The price ratio of silver to gold is one piece of evidence suggesting that silver prices are undervalued.  The current price ratio is 55:1, which at one time was as low as 16:1.  The availability ratio of physical silver to gold is approximately 3:1, however, investors are typically buying more silver due to the its cheaper price.  This is why silver prices may be dramatically undervalued.  The table below shows the price ratio of silver to gold over the past four years.  According to reports from Gold Bullion and Wealth Management Company, bullion dealers throughout the world have reported strong demand for silver and a shift in Asian and Middle Eastern markets from gold to silver.  The increased demand for silver is the result of it being undervalued and relatively cheap compared to gold.  The CPI-adjusted silver price suggests that silver should be trading at $122 per ounce.

Table provided by: U.S. Mint

Author: Tyler Sciortino

Current Student at Roosevelt University, Majoring in Finance.

Contact for questions or inquiries at tsciortino@mail.roosevelt.edu

Paper bought 3000 IRM Jan 2014 32.5 calls for $2.75 (13.7 times usual
volume) when stock was trading $32.16
Paper bought 2626 SE June 28 Calls for $1.20 (3.2 times usual volume)
when stock was trading $28.20
Paper sold 5000 MAT Feb 37 Puts for $1.375 (13 times usual volume)
when stock was trading $36.66
Paper sold 9525 MPEL Jan 17 Calls and bought the April 18 Calls for
$.60 debit (5.3 times usual volume) when stock was trading $17.69
Paper sold 1998 SSI Jan 25 Calls for $.075 (18.4 times usual volume)
when stock was trading $22.37