Market Curiosity: Exploring Markets And Systems

May 2, 2011

Quick note on the silver price action Sunday night… (updated)

Filed under: Just Watching — Tags: , , — Jeff Fitzmyers @ 10:21 pm

Likely most all of the weak longs have just been flushed out. And the margin hikes force the smaller accounts to the miners and ETF’s. The shorts seem pretty desperate to me. Margin should have been hiked a while back $5 silver days are equal to $25,000 moves. Having too low of margins helps the small accounts blow up.

EDIT: Margins should be, for everything, 90% of the notional value for the 24 hour maximum high low range for a 3 month look back period, updated every minute. That way everyone knows what the margins are and will be. None of this tomfoolery.

So why the [Sprott silver] sales? “Every dollar of money that was raised by selling shares of [the Trust]… was reinvested in silver or silver equities…” I think I will follow Mr. Sprott. I tentatively expect silver to bounce around in the 40 to 50 range and at some point have the miners lead the way up. Possibly seeing that begin today in SLW. Might take a few weeks to play out.

The dollar index is weak. Not only can’t it seem to rally on “news”, the staged news itself isn’t even that good. Surely it will bounce soon, but if all it does for the next week or 2 is flit around here, look out below.

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