Silver price discussion and analysis

Logique · 26 April 2011

Re: SILVER

A bit more research, and coming around to TJ's point of view. I did have a bid in for Wed morning on an Aussie junior explorer/nearly producer, but now reset that bid lower. The trader/chartist in me screams 'be cautious'. With thanks to Kitco.com for the chart.

http://equitybriefcapital.wordpress.com/2011/04/18/outlook-for-oil-gold-and-silver/
People are now flipping silver just like .com stocks were day-traded back in 1999-2000. I would also like to point out that while the metals continue to move higher, the miners are lagging. This is the kind of behavior seen near the tops in metals. I suspect that silver will retrace back to $30 or so sometime this summer. That will be the time to load the boat.

http://www.kitco.com/reports/KitcoNews_tech_trading_20110425.html
Paul Hare, executive vice president at the Linn Group agreed. "We saw a big spike high in July silver. If it were to close lower on the day it could be a possible key reversal. It is a fairly important close to watch today."
Technicians say when a market hits a new high for a recent rally move, but then reverses intraday and closes in negative territory that creates a so-called bearish "key reversal" day formation on the chart. If that were to unfold at Monday's close, Hare said "it would signal an interim top" in the silver market.
Hare's advice for traders right now? "Liquidate longs," he said.

Mr Z · 26 April 2011

Re: SILVER

It was taken close to $50 on thin volume on a light trading day, then it was taken down into the Comex to achieve a big looking reversal (painting purdy charts!). 26/4 is options expiry and surprise, surprise we have decent OI at $45! Now who'd thunk we'd end up below that on the 26th? LOL! The next big OI is $40... I wouldn't think we'd get there.

We are also lining up for roll over week going into the delivery month of May so expect the tree to be shaken in order to scare the weak hands off prior to entering the May delivery window. Expect a rally in the first week or so... two???... of May. From there it is becoming a little bit of a lottery, some say higher in June but I am not so sure at this juncture ---> either way we are closing in on an interim top here and it could be ugly, $30 to $25 by July August is possible.

Country Lad · 26 April 2011

Re: SILVER

Relationship of the gold price as a multiple of silver has become a bit interesting. Monthly chart.

The relationship is irrelevant if silver is now considered an industrial commodity instead of a precious metal.

Cheers
CL

Mr Z · 26 April 2011

Re: SILVER

Money or commodity, silver is both and more balanced in that regard than most other PMs. Right now investment demand is driving silver so its monetary component is in the drivers seat. That looks like to could last until June, then it will likely behave like every other commodity as Ben fudges around with QE2.5 Later in this bull market it will likely be solely driven by investment demand... at this stage I think it alternates between the two, most of the time industrial demand is king but then we have these periods of excitement when the 'investors' get a head of steam up. FWIW... traditionally this never ends well.

PS> I don't really think that the ratio means a whole heap to most of us these days, unless you are a gold silver ratio trader that never holds dollars! There are plenty of them around in bugland.

burglar · 27 April 2011

Re: SILVER

Agentm said:

Hi Agentm,

The video is really scary!
Before i emulate the "sheep" character, could anyone please tell me:

Is it factual, and is it balanced?
Is it true and verifiable?
Does the producer have an agenda?

Mr Z · 27 April 2011

Re: SILVER

burglar said:
Is it factual, and is it balanced?

No, the manipulation crowd credit those that push this market around with more power than they have and as a consequence they overestimate the upside. They also refuse to accept that the industry has many legitimate uses for the futures market and that the Comex is in fact the smaller part of the metals trading world. It is an over blown, extreme and US centric view BUT that does not mean that there is not some truth at the heart of the allegations.

burglar said:
Is it true and verifiable?

IMO it is distorted but none of it is 100% verifiable at our level of access to information.

burglar said:
Does the producer have an agenda?

YES.... this is silver, even the agendas have agendas!

The truth lays between this view and the official view however I doubt you are ever going to see a Comex default or a prosecution over manipulation. Even with all the data it would be quite hard to make a sound legal case.

Regardless we have enough proof in the price action since the likes of JPM have started winding down their prop trading desks. There was definitely an unsustainable presence controlled by the likes of these guys in this market. That said at some point the buying runs out, guessing where is the trick, silver is a small market and even a medium size player can become a self fulfilling prophecy. Anyway, when it runs dry the reaction will likely be big. Contrary to what the video would have you believe this is more about the futures market than the physical market, when it ends the gap between the two could be quite large. Watch that step... we are getting into the danger zone IMO. I think this ends between May and June, if you want silver wait till July to August, the lows could be $25-$30 if history is a guide... but then I bet the very next post will tell you that this time it is different!

Warning Will Robinson WARNING!

burglar · 27 April 2011

Re: SILVER

Mr Z said:
... but then I bet the very next post will tell you that this time it is different!

Hi Mr Z,
and thanks for your reply,
it will help me sleep at night.

"this time it is different"
Ha Ha!

I'm not in silver ... so not really qualified to post my opinion.
But watching these videos scares me enough to wonder if the next GFC will be triggered by something as irrational as a continued run on silver.

Mr Z · 27 April 2011

Re: SILVER

burglar said:
But watching these videos scares me enough to wonder if the next GFC will be triggered by something as irrational as a continued run on silver.

Some would have it that way but I would contend that the like of JPM have whatever they are losing in closing out their silver position fully hedged. After all they of all people fully understand what is driving this market and where it ends so not only would they be hedged they have the opportunity to make money when it ends. I very much doubt that when the situation is netted out they will come up losers... Internet legend has it that they are big losers ---> believe that at your own peril IMO.

konkon · 27 April 2011

Re: SILVER

burglar said:
Hi Agentm,

The video is really scary!
Before i emulate the "sheep" character, could anyone please tell me:

Is it factual, and is it balanced?
Is it true and verifiable?
Does the producer have an agenda?

"Is it factual, and is it balanced?" Well, it's kind of crude, but there is a lot of truth in what is said. Fair and balanced like Fox News?! I think it's pretty clear that there is an oversupply of debt and fiat currencies at the moment and this doesn't seem to be slowing down. You can't print or just create silver or gold and they have always had some value attached to them. They can never go to zero either.

"Is it true and verifiable?" Most of it can be seen with your own two eyes. The enormity of the collective debts can't, because we don't normally deal with this perception and many don't see perpetual and uncontrollable debts as a real problem. Imagine if institutions and government had to top-up on buying protection like silver and gold in the future. What would happen to the price of gold and silver then?

"Does the producer have an agenda?" Nearly everyone has an agenda. An agenda can come in many forms (more than the two listed here); one being spin or sales reps selling something that you or others (the world) doesn't really need. Another type of agenda might be spin and sales reps selling something that the world (now) really needs. And that is silver and other precious metals that are mostly currencies now, and not just industrial metals.

sinner · 28 April 2011

Re: SILVER

Lots of discussion over the interwebs about silver being in a bubble. I attach both linear and log scale monthly charts so the curious can make up their own mind. Usually this can be a good tool to notice simple patterning.

To me the thing that stands out most is that when looking on the silver monthly log chart, a test of 20 (or at least 30) at some point looks probable, but there is no indication of reversal on the monthly unless we tank really hard before May opens.

Linear scale

Log scale

I recommend clicking on these clean charts and examining in depth if you haven't already.

tothemax6 · 28 April 2011

Re: SILVER

sinner said:
To me the thing that stands out most is that when looking on the silver monthly log chart, a test of 20 (or at least 30) at some point looks probable, but there is no indication of reversal on the monthly unless we tank really hard before May opens.

Yes, it is interesting to note that your gold log chart was flat, but this silver one still has a curved upward trend. For the gold graph it fits well with a price driven by inflation, but the silver graph cannot be explained by inflation alone - indicating a speculative force on the price.

sinner · 29 April 2011

Re: SILVER

tothemax6 said:
Yes, it is interesting to note that your gold log chart was flat, but this silver one still has a curved upward trend. For the gold graph it fits well with a price driven by inflation, but the silver graph cannot be explained by inflation alone - indicating a speculative force on the price.

Just FYI, speculative force is an inference you are willing to make, not me.

Bolivian silver mine strikes have helped.

Here is another rather interesting chart, the spread between a single share in JPM and a single troy ounce of fine silver.

Glen48 · 29 April 2011

Re: SILVER

Owning Silver and Gold is like storing water / supplies when you live in a bush fire zone and a fire is comming, you stock for security, this time the fire is the USD, world debt, Banks, inflation etc .
Once the fire threat has passed it is safe to go back to you normal life style at this stage the fire is getting bigger, stronger and still comming.

enigmatic · 29 April 2011

Re: SILVER

I have a feeling this Silver bull has some time to run, I just hope you all start getting out once JP Morgan have found something else to buy to make a profit.

I can only see one reason it will maintain the highs and that will be if the US dollar was replaced for Silver.

with the increased prices you will see more silver mines popping up which would provide excess supply for a commodity which has no real increase in demand.

Interesting times a head I would still remain Bullish on Silver offcourse until the USD turns which will be at the next crash...

DYOR this is all my own opinion and should not be taken as advice

skcots · 2 May 2011

Re: SILVER

Huge move in silver. Can anyone point me to a chart that shows volume?
Things are getting interesting indeed.

explod · 2 May 2011

Re: SILVER

skcots said:
Huge move in silver. Can anyone point me to a chart that shows volume?
Things are getting interesting indeed.

Expected shakeout. Volume only about 25% of normal at this time though its moving up the last half hour and of course so is the price. Most traders still asleep.

Hope the following link helps.

http://www.cx-portal.com/metal/silver_en.html

skcots · 2 May 2011

Re: SILVER

Thanks for the link.

sinner · 2 May 2011

Re: SILVER

skcots said:
Huge move in silver. Can anyone point me to a chart that shows volume?
Things are getting interesting indeed.

explod has provided the Dukascopy feed, which is tick volume on the spot market not contract voume, just for clarification since he doesn't seem to be willing to point that out.

Futures contract volume on the two frontish months:

I made out alright in this mornings carnage, no complaints here.

I am pretty sure a move like that counts as one of the biggest most volatile moves in any commodity, ever.

Frank D · 2 May 2011

Re: SILVER

Silver

My view on Gold and Silver (Weekly report)

http://goldcoppersilver.blogspot.com/2011/04/gold-silver-report-30th-april-2011.html

Silver coming down into Support levels....

if the trend is going to continue higher, then it needs to stabilize around support
levels for the next 3-4weeks, and then push upwards from the last week in MAY
or early June.

There is a possibility that the USD dollar has found support and may rise or
consolidate over the next 4 weeks, which will help keep Silver and Gold prices in
a trading range

explod · 2 May 2011

Re: SILVER

sinner said:
explod has provided the Dukascopy feed, which is tick volume on the spot market not contract voume, just for clarification since he doesn't seem to be willing to point that out.

Futures contract volume on the two frontish months:

View attachment 42693 View attachment 42694

I made out alright in this mornings carnage, no complaints here.

I am pretty sure a move like that counts as one of the biggest most volatile moves in any commodity, ever.

Sinner, not sure what I do wrong for you all the time. I posted the link up very quickly to try and help out and then went straight out the door for another test at the hospital re my health. Though I do leave the puter on and stay logged in, you may think I am still present. Just got back.

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