I have been harping lately about SLW and how it accurately alerts the short term moves for silver. Most of the other stocks trade in line with spot silver AFTER the move is in process, either up or down. SLW is unique because it often acts counter-intuitively BEFORE we see a major trend change for silver. Last May SLW was selling off sharply even while silver was still climbing, presenting an accurate leading indication that silver itself was in the bombsights for another big raid. We got it... Lately SLW has been outperforming the rest of the sector, and telling us when the metal is set to move higher. Note that SLW had one of the biggest upside days of the year yesterday, and now today silver itself appears to be breaking above the downtrend line.

To get even more interesting info, I look at the derivatives for SLW. One option series for the $42 calls has doubled overnight. The prior close was 45 cents and the bid is now a buck. These are extremely thinly traded, and the market is begging anyone to unload into this higher bid. It appears those who wrote those calls now think that SLW will trade above $42 before Sept 2011. If so, that is extremely bullish overall for silver itself, given the very high correlation that SLW presents with the trend for the metal.

I firmly believe there is a sinister undertone to all of this. For example, I think some hedge players and big shorts were tipped off early in the day yesterday that the Fed minutes would reveal discussion already underway to resume monetary easing. The big silver juniors were well into the red even while the metal was weak. The heavy volume in the jrs and the metals is a smoking gun that not all pigs are equal. Some friends of the administration were illegally tipped off that they needed to reduce exposure to shorts before the rest of the market learned the story. And I think this kind of thing goes on all the time. So I do not think it is a coincidence that SLW is so reliable to tell us what is coming.

Look up the trading history for yourselves people and tell me if I am wrong.

cheers!

mike