Market Curiosity: Exploring Markets And Systems

April 30, 2011

If current silver pause is shallow due to shorts covering, I imagine a large price rally is nigh.

Filed under: Just Watching — Tags: , , , , — Jeff Fitzmyers @ 9:05 pm

+ Jason Goepfert, “This is 4th time in 30 yrs that US Dollar fell 8 days to 52wk low. Others = quick rally, then lower low (10/25/04,4/19/07,3/6/08).”
+ How the COMEX Didn’t Lose its Silver Lots of info on the silver delivery process.
+ Comex Explains Large Adjustment in Silver & Gold Registered Inventories “… the reclassification was … due to a change in its reporting system to electronic warrants and the metals that had not fully converted from paper to electronic were moved to eligible.”
+ Ghost Informative short article about some historical aspects of timing major currency changes of trend.
+ Ed Steer: Silver on fire in India: “Despite a 100% jump in price in just over six months from October 2010, demand for the silver metal refuses to die in India.”
+ Ed Steer again: “There’s still the possibility that the bullion banks may blast gold to the downside one more time, to get one more shot at the silver shorts…but, regardless of that, the price management scheme by the bullion banks in both the silver and gold markets, is obviously on its last legs. From this day forward, all price bets are off.” Pretty strong words!
+ SilverGoldSilver sums it all up well:

“8,438 contracts covered. Bullish… Thats a large amount of contracts to be covered in Silver especially at these prices. Now if I was JPM and I knew where the price of silver (or anything is going since THEY are the market) WHY WOULD YOU COVER AT ALL TIME HIGHS? If silver was truly in bubble territory they would have added to the shorts and covered at a much lower price. Something BIG is about to happen. This is a HUGE tell unless the data is a set up for a bull trap. I doubt this is the case… This is huge. Realize that the biggest players in this market dont cover to take massive losses at 5000 year highs if they know its not going higher. So. We go higher. They have given us a “tell.” May not be tomorrow, but this report just told me to keep buying.

Some “tops” to compare with April 2011’s:
+ The 10 EMA was at least tagged by the 3rd day following the high.
+ Price never challenged the high just 3 days later.
+ Price had a marginal new high followed by a correction twice. This is kind of what I think Mr Ferguson suggests. (Up next week to about 52, down possibly the next 2 weeks to 47(?) then up enough to buy small countries. And this fits in with the USD index having a dead cat bounce off about 70 for ?2? weeks ??)

One speculative interpretation for the past few trading days is that the naked shorts used the advantage of many dumping their longs and / or going short at the big psychological number of 50. Now if price goes up next week to about 52-53, would that be enough to entice short covering by the new shorts. Then the market can fall again with gold and possibly stocks, allowing the new longs to get whipped once again. I suppose there are not a lot of other options. Once silver breaks free of everything, it might go up a lot and be “unmanageable.”

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