Submitted by SD Contributor FW:
Since early September, will all the huffing and puffing the cartel has directed towards silver, they’ve accomplished virtually nothing other than scaring the bejesus out of all but the most informed strong hand silver investors. All the cartel has been able to do is push silver under $34 for a few hours per raid per week. That’s pretty much unprecedented, yet sentiment remains so despondent that few seem to even notice that the cartel is actually already showing the weakness one would expect to see at the initial stage of a commercial signal failure.
The cartel has been attacking like mad for the better part of a whole month now, ripping out not only the kitchen sink but taking much of the rest of the plumbing out of the walls and hurling it at the paper markets. Yet even through one of the fastest additions of short interest we’ve seen throughout this entire bull market, the cartel has little to show for it’s effort.
I believe we have been witnessing the initial stage of an evolving commercial signal failure.
With holiday trading behind us Tuesday, I think another retest of $35 will come. It might take two days to blast through, but even the act of demonstrating once again that dips below $34 are being bought like crazy should provide the final kick in the bull’s rear and get it moving over $35 for good by the end of the week.
With all the raids over the past month since QE3 was announced, they’re amounting to nothing more than a hill of beans and an over-exposed short position. With silver, in particular, we’ve already seen a pattern that resembles the first stage of an evolving commercial signal failure — an intermediate-term defeat of the cartel. With all their huffing and puffing, their attacks since early September haven’t been able to keep silver under $34 for anything more than a few hours to a day or so.
Physical demand is simply too strong and the cartel is going to retreat, letting silver move higher (into the low $40s in under 30 days). It’s 9pm EST Monday as I type and spot silver is once again over $34. See this for what this represents, friends. It’s nothing less than astounding.
The cartel has been attacking like mad for the better part of a whole month now, ripping out not only the kitchen sink but taking much of the rest of the plumbing out of the walls and hurling it at the paper markets. Yet even through one of the fastest additions of short interest we’ve seen throughout this entire bull market, the cartel has little to show for it’s effort.
I believe we have been witnessing the initial stage of an evolving commercial signal failure and a retest of $35 will likely come tomorrow, Oct. 9th, now that holiday trading is over.
Even if I’m wrong, the downside risk is tolerable given tremendous demand for physical and we’re eventually going up in the weeks and months ahead regardless.
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They have been hammering SLV hard Doc, no question.
With the volume of commercial shorts, I have sitting on the fence.
Kinda’ like my neighbor says, “it doesn’t matter if its $40,
you are not going to lose any money”, (in the long run).
Keep on stacking, every ounce of physical drives the wedge in a little deeper.
Great article FW!
Everyday that passes, their position weakens. This is so because everyday more people become aware of the dismal economic/monetary state the world is in and take action (by buying gold/silver). It is merely a matter of time before a tipping point is reached and the masses start pouring in and their combined buying power overwhelms the Cartel. :D
So me buying another 100, 500, or 1,000 oz. is going to drive the stake in the vampire’s heart, heh? Really? WOW! I did not realize just how powerful little o’ me is! People come on, I am ever much a silver believer as anyone else, but this false idea as to what will ruin the cartel is bogus!!! The one thing that will bring a change is when the institutional buying kicks in AND IT HASN’T EVEN BEGUN!! Keep stacking is crap. Stack for what? Have you noticed no one says what to do after you have stacked. The ownership of silver is a store of wealth, not an ego thing to brag on how high your stack is.
@sr
The leverage counts already in hundreds x the physical they have available. From this we are quite sure, or how tinfoilhattish would it be to think that the accounting of COMEX suppliers is not true. Andrew Maguire says at least not this way around It can be.
They are forced to leverage more and more, and by the time it gets out of hand your 1000 oz will have to move millions of oz of paper. It might as well be here already, how can you say it’s not?
That ounce is probably equal to 1,000 ounces of paper the cartel can’t sell. It adds up. A single lowly virus particle can bring you down.
Not this time, I’m going to wait a little bit longer until silver’s prices drops. For the moment, I’m only buying junk silver since they are cheap and they have a low premium over spot.
I know that Clive Maund has been calling for an imminent silver price collapse for some weeks now because of the massive build up in the commercial net short position but he never mentions the massive global physical precious metal demand or the physical precious metal shortages. He also seems to think that in a deflationary environment the price of precious metals would collapse which is absolute nonsense because the resultant global banking collapse would lead to investors fleeing to the only true safe haven investment around and that certainly isn’t US Gov. Debt.
The bankers have a big problem as physical precious metals are scarce and disappearing east. The current gold demand is either being met by raiding allocated accounts as Jim WIllie indicates or the western Central Banks dumping their reserves on the market as Eric Sprott believes. Either way it is inevitable that at some stage in the not too distant future both the COMEX and LBMA will default. I really don’t think this event is very far away.
“The current gold demand is either being met by raiding allocated accounts as Jim WIllie indicates or the western Central Banks dumping their reserves on the market as Eric Sprott believes.”
I can easily believe in segregated accounts being stolen, as we have multiple examples of this in recent history and what has already happened can certainly happen again. I don’t understand why Sprott would believe that central banks are dumping gold reserves on the market at this time, though. Everything I read about the CBs says that they are buying in large quantities and not selling gold. Is this disinformation on the part of the CBs? Hard to say.
I would really like to believe this. JPM has sold more paper than Silver has been mined. They can short
forever and ever along with BAC and other Commercials. It will be slow going before The Cartel Turds are flushed.
Patience is our only hope for the long run on both Gold and Silver.
I don’t want to knock Clive Maund too hard because I think he has insights worth following. But he also has consistent blind spots. He’s among those that frequently fail to notice when COT signals are not the most important thing to be paying attention to and/or must be placed in broader context (e.g., right now). He’s also frequently thrown into the premature bear trading camp when traditional sentiment measures of price momentum spike without confirmation from qualitative sentiment measures (and price monument spikes in a tiny market like silver without indication that meaningful participation is behind the spike, visible only via qualitative analysis, frequently results in flawed and out of context interpretations of price momentum technical analysis).
Again, I like his work. I use work like his to test my own assumptions. But he leans too much on technical analysis and COT analysis for his own good and frequently makes incorrect calls as a result.
There are people here just like the opposite position of those who see silver going down, and none of them here like to hear that the possibility of silver retracing its gains is probable. And when someone like Clive Maund provides the technicals that causes him concern, his thoughts are cast off! Lets not forget there are thousands of people who are still in silver at $45/oz, and hopefully those people have averaged down when silver was down to $26-$27. If they did, they would still be in silver at $36/oz. ($45 + $27 = $72 divided by 2 = $36/oz. Therefore, how many of the silver believers have not made a dime since the spring of 2011?
Let me make something clear. I don’t think we’re watching the unfolding of a full default of COMEX or a monster move — not yet. One can have an intermediate-term commercial signal failure forcing the cartel to retreat to higher ground (higher prices). That is what I expect … a move to the low $40s in under 30 days. It’s just part of the overall stair-stepping rise in the silver bull market that will unfold over the months and years to come. A new nominal high in silver soon to follow, but we’re not likely to see a moon shoot starting this week … just a move to the low $40s in under 30 days.
“A new nominal high in silver soon to follow, but we’re not likely to see a moon shoot starting this week … just a move to the low $40s in under 30 days.”
Good. I don’t want to see any moon shots, thanks. Anything that goes up like a rocket often comes down the same way and usually with a really big BOOM! and a fireball at the end of the trip. Been there, done that and it was no fun at all.
I’m not convinced of the 30-day number though. As we’ve seen over and over again, the precious metals can trade sideways for LONG periods of time, so pinning down their price changes to a 30-day window seems presumptuous.
Now let me see if I have got this right? Shorting silver is the cartel’s main weapon against the rise of the price of silver. But what was done in April/May of 2011 when silver was rising to $49/oz? They raised the margin calls until the bull market was crushed! Rest assure should silver begin to rise too much, look for more margin calls to stop the price of silver from reaching its potential.
I also don’t think that silver will reach around 40$ in 30 days because that’s way too bullish and I’ve never seen silver moving like that. Who knows? We will just have to wait and see it ourselves since that is the most accurate way of seeing silver’s price.
I wrote up some observations yesterday in http://www.silverdoctors.com/cartel-extends-pm-raid-on-monday-asian-open/ .
Since then having a bit more of a look at volume numbers I noticed something odd occured mid June, volume dropped off substantially and levelled out, using the daily chart on NetDania, volume only goes back to late 2010. Not only does the volume drop but the massive spikes in volume have pretty much levelled off from up to 10 times it’s volume before that date and it is instant on the chart. What happened then ?
It looks like someone has moved out of the market some how, more likely than not out of the paper market.
As FW intimates above, I also believe we are close to the separation of the phyzz and the paper prices, the drop in volume indicated at that time is due to funds going more and more into physical Silver and thus – not leveraged!
I don’t believe we’ll see the hedge funds go into contracts due to the rising awareness of the shortage of physical Silver.
There was an article a few days, even a week or so ago about JPM’s shorting and purchasing phyzz, to those in the know -
Can someone sell paper to buy phyzz then sell off some phyzz to close out shorts and thus holding phyzz due to price increase ?
Is this a possible reason for the drop in volumes ?
“Can someone sell paper to buy phyzz then sell off some phyzz to close out shorts and thus holding phyzz due to price increase ?”
I don’t see why this could not be done but it is likely to be costly. Thanks to the use of leverage, it is possible to lose more on the shorts than the phyzz is worth. What then? I guess that they could open their checkbook and put more money in to cover their shorts, if they wanted to maintain them and not be forced to sell at a loss. I don’t see anything illegal about doing this but the motivation escapes me. Not that I am any kind of knowledgeable bear trader, of course.
Yeah OK, it’s all pretty much gobbledy gook to me. I’m trying to ask smart questions but just can’t get me ‘ead ’round it : )
Particularly that volume anomoly in mid June. It deffinitely looks like some one left the market on the one day NetDania chart. If there’s been no noticable drop in shorting then it’s got to be on the long side, right ?
On the following days of the volume changes there was a dip to new lows in price then the sidewards action we saw till early Sept. then the price has risen but the volatility appears to have gone out of the market since the volume has gone down.
Could this indicate an unwinding of paper trades and a more consistent reflection of the phyzz market ?
$40 in 30 days …. its possible but so is $60 or back under $30 there is still enough shorts out there for anything to happen
We will have to wait and see how accurate FW’s predictions are then.
I personally don’t think that silver will hit 40$ in under 30 days because it’s way too quick and bullish for silver. Although, I followed AGXIIK’s prediction saying that silver will be in short supply and it’ll go up in august 2012 and he was right! It’s thanks to him that I was able to average down the prices that I’ve paid for my silver.
‘Connecting the dots’ for myself, I’m reaching the same conclusion as FW. In addition, my fascination with the signs of dissolution connected with the banknote scheme only further confirms his sense of immanent resolution in silver’s ‘supply question’, translating into a significant impetus to raise its bid. Certainly, if more generalized interest in owning silver is being dissuaded from realization by actual possession, as the CNN propaganda piece, that Doc highlighted, indicates, then the extremely tight supply situation should force a ‘response’ from the bankers if these sorts of propaganda campaigns fall short.
Nevertheless, as Draghi was lamenting continued rejection of borrowing, today, the resulting downward spiral of the banknote system remains the truly decisive factor that will compel ever more intensive flight to Honest Money … in hand. So, Mannarino’s confidence, that market manipulation is merely a temporary nuisance to be taken advantage of, is also well conceived.
The elegant beauty of rare metal in its role as money is its irresistible power to restrict us all from financial flights of fancy, whether ‘high-born’ or ‘commoner’. The truth and benefit of that rational reality is once again to be proven immutable. For some, it will mean dread woe, for others, a rejoicing and long-awaited relief.
Could a CB not sell 100mt of physical gold and then purchase back a multiple in futures? Digitally they’d be net long, yet in absolute terms, the gold would be gone to the East.
Look for silver to take a dive this morning. Silver is showing little to no strength this morning.
“They raised the margin calls until the bull market was crushed! Rest assure should silver begin to rise too much, look for more margin calls to stop the price of silver from reaching its potential.”
Margin calls only work to the extent you have leveraged longs. If the longs plan to take delivery then even margins at 100% are irrelevant. In those types of circumstances other avenues are called for, see MF Global. Eventually a large enough whale will stand for delivery and they’ll have to shuuter the comex.
I didn’t that you had a SilverDoctors account BrotherJohnF! Unless if it’s someone else who created an account with the name of BrotherJohnF.
@ snowrider
“keep stacking is crap.” You are out of your mind if you think that is a true statement, or an accurate financial forecast. After hearing that one line I know I’ll never have to read another one of your posts on here again, because if you are so uneducated in human history to think that things will turn out anything but badly for those who put their faith in paper currencies, than you are completely uncredible and are not even worth listening to. The fact is that paper currencies are about to crumble on an epic scale, and if you don’t want to watch all you’ve worked hard for disappear in what could be an instant, then protect your wealth by continuing stacking physical precious metals. What is your advice to people exactly? I can state mine in two words: KEEP STACKING!
savesilver,
My point is you just do not buy more silver because it dropped $.55 CENTS! Come on. You buy 1,000 oz and you saved $550, but you had to purchase $34,000 of silver. I choose to wait so I can save $3-$5 thousand when I purchase. It may be possible that I have owned silver longer than you have been alive. However, my longevity does not make me an expert, nor does it make me smarter. All it provides is that I may have seen more. That is why I sold at $35.00. I have seen this before and I will continue to stack, but I try to use the house’s money to do that. If the cartel chooses to, they can make it very hard on silver. Now you are free to believe otherwise, but history will prove I am right. On the other hand, you are correct, eventually paper currency will fail, but until it does I will watch the margin between the highs and lows and hopefully I will regain the silver I sold; plus some extra if the price falls. The fact is, I risk possibly losing what I sold last week. That is a risk I am willing to take because I do not see the game ending in 2012. I look for another drop in price. If I am right I will have gain ground, and yes, my stack will grow taller. But as I said, me buying 100, 500, 0r 1,000 oz. is not going to cause any alarm to the cartel.
“KEEP STACKING!”…
–”Argentum est pecunia plebisque.”
–”La plata es el dinero del pueblo.”
–”銀是民眾的錢.”
–”Silver is the money of the people.”
There’s also in french:
- “L’argent est l’argent du peuple.”
Notice Snowriders Icon oddly looks a bit like the Obama Logo
?
Snowrider has a few points but really they are just talking to get a reaction…Ignore them overall.
IT could be worse…it could be Chris Normann over at JSmineset/FB
Come on Dickbird;
Its just a sunset for heavens sake. You may not like what I write, but please don’t lump me with the man in the big white house. The only thing I have in common with that man is I breathe the same air as he does.
For what its worth I am very pro silver and anti currency, but by selling high, I give myself the chance to increase my holdings. Plus when I sell I place myself in the position if the price goes down I’ll own more silver. If the price goes up, my net worth increases.
I don’t get the “trading Silver” mind set, we are talking about the phyzz market right ? Who in there right mind would be playing with their own $$$ in a brokerage account in the paper market. That position outlined, Perth Mint spread on 1oz silver rounds right at this moment is about $11.50, yep that’s correct $43.51/sell to $31.90/buy, It’s not until you get to the 1kg coins that price spread drops below 10%.
Include in that the fact you got to get your phyzz, drive to the market, deliver said phyzz, obtain your cash and return home then wait for price to drop and then go back and purchase more phyzz.
Or in another scenario use a postal service.
Think of Silver as freedom and what you would trade your freedom for, what is it worth ?
Then again, I suppose that argument is mute. Have a look at where the USSA is right now !
Why would you let go of your freedom, why would you even contemplate getting rid of your phyzz in this market place ?
Not I! The paper market is for fools!
Last night 1 Englehard 100 oz. bar sold for———$3,275.
Spot silver was at that time $33.91
Now you add up the numbers and realize there is silver to be bought at premium prices.
That means that on November 8 2012, silver’s price will be at about 40$ per ounce since the author said that it will reach that level under 30 days from now. If so, then we’ll see the results afterward and if it’s wrong, then we’ll also see what will happen…
How is the margin situation now compared to the 2011 smack down? Is there as much room as then, or has the tool partly been used up and not reset?