Silver’s sell-off has continued Thursday morning, with the shorts pile driving the shiny metal down as low as $36.74. Silver is now down 24.7% since last Friday afternoon, a breathtaking decline.
The million dollar question when will silver finally bottom?
We will not be able to say silver has bottomed until it has made it through AT LEAST 2 trading days without further declines.
As silver has now taken out $38, it looks like silver will test the $35-$36 zone before placing a final bottom.
If $35-$36 holds, silver will likely quickly rebound into the lower $40′s, before consolidating.
It is obvious however that the cartel is intent on forcing the price below $35-$36, triggering a massive new wave of stop-loss liquidations (especially with 30% higher margin requirements) which could induce a capitulation all the way down to $30-$32. If they are successful and $35 is taken out, we have likely seen the highs for silver in the first half of 2011, if not all of 2011. Such a massive correction will cause silver to spend a significant amount of time consolidating and building a base for its next move higher.
As QE3 is inevitable, we fully expect the cartel to continue throwing everything they can get their hands on at silver to force it down towards this $30 level. $30 silver would provide some breathing room for The Bernank to announce QE3.
That being said, silver should be continually bought all the way down. Bottoms are exceedingly hard to call exactly, and you run the risk of missing out on the correction. Buy professionally. You should be REACTING to price weakness, not planning your trades in ANTICIPATION of where silver might fall to.
Buy into this price weakness in the $37 level, here and now, today! If we are correct and price falls lower and tests $35, buy more. If $35 falls and we see a capitulation down into the low $30′s, RESPOND ACCORDINGLY!
Conquer your fear, and RESPOND to price action professionally.
Nothing has changed in silver’s fundamentals. JPMorgue has not covered their massive naked short position, silver is not suddenly in a massive oversupply, the US dollar does not suddenly have excellent fundamentals.
The only thing that has changed in the past week is that for a limited time, we can exchange our cotton fiat for an increased number of ounces of silver. Don’t waste that opportunity.
We do not share in your gains, and we do not take responsibility for your losses as well. Do your own due diligence, and trade accordingly.
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Looks like you might be right Doc, still havent found support yet.
BTFD!
looks like $35-$36 is holding for now Doc, we'll see if we can stay above it for a day or 2!
Great diagnosis Doc! Here's mine:
http://www.treasurefreedom.com/2011/05/05/silver-silver-what-happened-to-silver/
I see much discouraging comments in the blogs I visited. The mainstream press is full of doom for silver. Our forces seem to be in disarray everywhere. I see $32 coming, but is it going to bounce there with guys like Soros liquidating their PM positions.
No discouragement here…this brings back fond memories of 2008, when we were buying silver hand over fist all the way down to $8. Corrections like these are great opportunities to substantially increase your silver holdings, or for newcomers, to establish a position at a very strong entry point.
We have had a severe correction, and we are still over a 4-fold increase from the correction 2.5 years ago in late 2008. In another 2-3 years, we will look back at the $30's with the same perspective from $150!
silver's bouncing…is the bottom in?
Is there a different analysis for specific silver plays like SLW and SVM as opposed to SLV? Does anyone think buying far out and out of the money SLV calls is a strategy? Anybody?