Market Curiosity: Exploring Markets And Systems

May 14, 2011

Silver speculation: down to 20-23 frn’s/oz then rocket up??? (backwardation too) (updated)

Filed under: Just Watching — Tags: , , , , , , , — Jeff Fitzmyers @ 1:40 pm

Assuming the COT data is honest, the banksters have not managed to cover shorts. I assume they will try, or need, to drive price down. Driving price up has not worked. Possibly banksters have not been able to cover because good traders know the shorts are trying to exit and so keep anticipating moves. Say the price does go down to 20 and the banksters are still very net short while the good traders have had a very profitable ride down, and yet are still net long. Good traders are sitting on a wad of cash AND net long, the physical market is being bought with alacrity, the down cycle has run it’s course, the fed/gov is still inanely insanely printing, and silver has been pushed rather far under water. Getting down to about 20 is expected from a technical point of view, but from the point of view of increasing backwardation. And in that situation, what choices do banksters have? Buy first = rocket. Bailout = implies rocket. False flag = ??? Speculatively, that is an explosive position. However, I don’t really understand the role SLV and GLD play. Harvey Organ has an interesting speculation about that. Basically the recent price drop might have been used as a screen to remove a chunk of the physical. Adam Hamilton see things more traditionally.

Edit: Just to be clear, I. more interested in the potential turn dates and if price will whipsaw around them, or reverse. In this case, if silver drops into June 13-ish, the deeper the drop, the more silver might want to bounce up. If it rockets up great, if it sputters up, at least a small profit might be available.

Mr Hamilton also suggests the drop would take about 6 weeks which takes us to Martin Armstrong’s turn date of June 13th (possibly at about 25 frn’s/oz).

Most blow offs return to at least near their launch pad. That would be about 20. And an AB=CD = about 23. And the monthly RSI > suggests a return to the monthly 34 EMA which is about 23.

Support based on monthly chart.

SIFO still indicating strong near term demand via backwardation.

Note that even though price has doubled, SIFO keeps going down. Rising prices are not satisfying demand.

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