Market Curiosity: Exploring Markets And Systems

May 4, 2011

Great theory: “They wanted silver to look parabolic and then fail in order to scare everyone off.”

Filed under: Just Watching — Tags: , , — Jeff Fitzmyers @ 9:33 pm

The silver “blow off” did not look right while I was watching the tape, but I could not articulate why and so waited until someone like Jesse and friends could:

Here is an interesting theory on the recent silver run up and correction which someone pointed out to me this evening from a chatboard… there was no denying that the parabolic increase was just dodgy… I really believe that the core of the problem involves the deliverable ounces at CME, a big looming problem…

Wall Street Bear Discussion Board: Here is what I think happened, the Commercials have been decreasing their net short in this latest runup, in other words, they helped it go up by covering short and going long. I believe they were doing that to accentuate the rise and to be able to liquidate their profits and accentuate the drop and cover short when the spec longs gave up. They wanted silver to look parabolic and then fail in order to scare everyone off.

Well it looks like the large specs have held tight, the COT report on Friday should show that the large long specs increased longs and are more net long while the commercials are more net short. Yesterday it was the commercials selling at a discount to the spec longs who just soaked up all the selling the commercials could do.

So today they raised margins again because I bet that the OI didn’t drop much today if they had to raise margins again.

This is setting up for a huge snap back rally if my conjecture is close to correct.

What the tape felt like to me was “them” letting price have some reigns on purpose to reach 50 sooner / too fast (although at the time I did not know what the price target was, and was not able to capitalize on it either). But price idd not really want to go up like that so “they” would goose it. Rather crafty if true 🙂

Also, I really wonder why all the physical silver is just not gone. It would only take a small panic and a few wires to clear out all the major dealers. Mr. Tulving, one of the biggest dealers, reportedly has just 450,000 ozs — that’s $18 million including shipping! Why is it still there? Don’t people understand what’s going on?

US dollar index setting up for a small panic?

2 Comments »

  1. do you think the dollar will effect the silver run once POMO ends? what other shake out do you see that could effect the silver run in the future?

    Comment by enron89 — May 5, 2011 @ 8:53 am

  2. I barely know what POMO means. I just classify it all as printing money. If I have it right, according to the Ticker Guy, http://market-ticker.org/ the gov and fed basically can’t stop printing. They might just to terrorize people to do what they want, but things are too far gone up the exponential slope. Is there any political will to actually just balance the budget, never mind pay down some debt so a moderate interest rise is not lethal? None that I notice.

    I think silver is going up because of printing, and it’s simply too scarce. So price must rise to reduce usage and increase recycling. Pretending these things are not happening will only work for so long.

    Someone made a comment that silver is not really money since it is too bulky to carry around. Silver has been money for 5,000 years. It just needs to be remonetized so that it’s not so “bulky”. This directly threatens the central banks’ parasitic game and they will fight to the death. The banks’ will ultimately fail because they take too much.

    Comment by Jeff — May 5, 2011 @ 10:05 am


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