I see that silver has come back $1.15 off its bottom. Remember back when a $1.15 rise would have been exciting?
Will the increased margin requirements increase the demand for physical silver as an alternative to paper silver? Remember the high premiums physical metals brought back in late 2008?
Just wondering.
TD
Numismatist. 50 year member ANA. Winner of four ANA Heath Literary Awards; three Wayte and Olga Raymond Literary Awards; Numismatist of the Year Award 2009, and Lifetime Achievement Award 2020. Winner numerous NLG Literary Awards.
We need a fundamental reason to keep the momentum train rolling. >>
The world won't run and the factories will shut down without silver and due solely to the manipulation there is less silver in the world than gold.
No matter how high silver goes there will be little decrease in demand and little increase in supply. There is no resistence above $24 which appears to be behind us. China isn't gioing to stop growing even if we never fix our schools or ways. Much of the world's silver supply is illusory and will evaporate if trhe status quo is upset. The government can't legislate change out of existence and you can't fool mother nature.
There has to be a reckoning in thelong run and the longer it's put off the more destructive and potentially catastrophic it will be.
This discussion reminds me so much of everyone in Florida talking about permanent 20% annual appreciation in real estate. That was of course a long time ago. Two and a half years. Having worked Wall Street for many years I was reminded then and am reminded in this discussion of how well we all kid ourselves. Me included.
I have been the beneficiary of many a short squeeze using out of the money calls in the short term. When I was trading (I am out of that thank goodness) I would spend most of my time researching looking for this sort of situation.
Most of us learned this game as children. It's called musical chairs. It's great to be someone who carries their own chair but it is best to be that one with their finger on the button of the music box.
Proud recipient of YOU SUCK more than once and less than 100 times.
Silver is cheaper than gold. People are now buying because of that.
Thinking Silver will crash is insane. Gold and silver will remain high for the next few months until the all the governments of the world straighten themselves out.
Silver has just about made up for its losses in the afternoon. That to me shows that it overcame yesterday's obstacles and is ready to run on for a while. I understand what is being said here but silver has been held down too long and is ready for a breakout. The world is too big now for one event to hold the demand down.
<< <i>He did make a great call on the MLP gas pipe companys, which are great and look like they have more to go, so he probably right on this call too.
Generally, you get a second chance to get out though and save some profit, so you better be smart enough to a least get that right. >>
Ahhhhhhhh....someone remembers this. Good recollection! BTW, I still own about six of them.....locked in yields in the 12-18% range, the stocks have gone up 2x-3x and they are raising their divdends once or twice a year.
Let's see...Linne energy (LINE) went to under $12...20% dividend. NOW it's around $37! Most of the stock I bought was in the $16 range. So what's my total return? You figure it out...I'll just collect the 17% that I'm getting.
That's my business...making $$ for clients. Watching silver and gold get manipulated is a muse to me. I like watching and picking a spot to trade once in a while.
<< <i>He did make a great call on the MLP gas pipe companys, which are great and look like they have more to go, so he probably right on this call too.
Generally, you get a second chance to get out though and save some profit, so you better be smart enough to a least get that right. >>
Ahhhhhhhh....someone remembers this. Good recollection! BTW, I still own about six of them.....locked in yields in the 12-18% range, the stocks have gone up 2x-3x and they are raising their divdends once or twice a year.
Let's see...Linne energy (LINE) went to under $12...20% dividend. NOW it's around $37! Most of the stock I bought was in the $16 range. So what's my total return? You figure it out...I'll just collect the 17% that I'm getting.
That's my business...making $$ for clients. Watching silver and gold get manipulated is a muse to me. I like watching and picking a spot to trade once in a while. >>
I have no clue about any of this, but it is always good to see you step up to the podieum and let that trumpet rip!
hope all is well on your end Jay, always good to see you popup.
<< <i>He did make a great call on the MLP gas pipe companys, which are great and look like they have more to go, so he probably right on this call too.
Generally, you get a second chance to get out though and save some profit, so you better be smart enough to a least get that right. >>
Ahhhhhhhh....someone remembers this. Good recollection! BTW, I still own about six of them.....locked in yields in the 12-18% range, the stocks have gone up 2x-3x and they are raising their divdends once or twice a year.
Let's see...Linne energy (LINE) went to under $12...20% dividend. NOW it's around $37! Most of the stock I bought was in the $16 range. So what's my total return? You figure it out...I'll just collect the 17% that I'm getting.
That's my business...making $$ for clients. Watching silver and gold get manipulated is a muse to me. I like watching and picking a spot to trade once in a while. >>
Hi Jay, Steve here. What are your evaluations on what transpired yesterday and what seems like a slight recovery.? Is it just profit taking or what?
Look....silver ran TOO MUCH, TOO FAST. A true bull market doesn't go up 50% in 10 days. You had people shorting the market every day and blowing their brains out when the hedgies started buying. It almost looked like a setup.....pragmatists shorting...predators squeezing them by running prices up every day. I have no idea who would buy at $29! It was $20 last month.
Certainly everyone was watching for a break. Trust me, I talk to some of the largest bullion dealers and experts in the cash markets. What triggered it? Well, I'm sure the 30% margin rise was one trigger, as was +$2.30 in a DAY, but I think one noxious fart in the slver pit could have done it, It NEEDS to correct....and $5-7 wouldn't surprise me at all. Commodities markets get ahead of themselves, especially the volatile ones because the leverage becomes so great that nerves, fear and margin calls start to take over the fundamentals. I am not a silver basher...I just see something that went way too far too fast. I am still a precious metals bull...and have been since 2002. Prior to that I was bearish from 1980 to 2000. I mean, a real bear...I would constantly dissuade clients from going into metals after reading some guns&gold newsletter. Ther was just no reason to buy...the USSR had collapsed, you had all the old republics selling gold to get off their feet and Europe was liquidating to save their economies. In fact, one of the things that first got me to start watching more closely for an entry poin(two years in advance!) was when I saw France, Germany and Great Britain sell gold in the very late 1990's. That was a sign of the end of an era to me...that's my thinking. It took gold almost 3 years of basing to finally exhaust the bear. Look at the long term charts and you'll see how it languished down between $275-310 forever. That's when my technical work finally put in a buy point on a weekly close above $318.
I was never a "sky is falling" buyer and I'm not an "end of the world" seller. I shouldn't have used the word "DONE" and I stated so later. I just meant that this party was getting busted. Hell...I'm still not sure I'm right! This market is swinging $2.00 a minute! These are moves of historic proportion! But that's also a sign of the end of a fast and furious move. Increased and extended volatility speaks loudly if you watch commodity markets for years and years. It's like the big finale at a fireworks show. Let's see what happens.
I hope EVERYONE makes money no matter what their position.
<< <i>Silver is cheaper than gold. People are now buying because of that.
Thinking Silver will crash is insane. Gold and silver will remain high for the next few months until the all the governments of the world straighten themselves out.
Silver is only up .77 this morning. >>
The words of a bull...Ye spake too boldly and too soon.
Now silver is down 1.80 after being up. You think that's good action? You think it's insane?
Today's action. Apples to apples. (I think times frames and closes are getting confused especially if folks are using Kitco 24 hour quotes vs Comex vs SLV blah blah blah)
SLV + $1.95% or so today
ZSL (double short) - 3.25% or so today
Comex close over close was down as SG stated.
I also TRULY appreciate any words SG offers whether I agree with him or not. Great stuff. I aslo hope we all find a way to make $$$$. MJ
Walker Proof Digital Album Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
I agree with those who anticipate a correction. I think silver will keep rising maybe a few more weeks, to an unknown peak--maybe $30 an ounce. Then, wham! It'll suddenly plop back down, the way it and platinum did in mid-2008. After that, it'll climb more rationally.
As for gold, I think it's also rising too fast. It should rise, but not this much. It'll correct, but then I predict it will return where it is now in four to six months, rising further but not all the way to $2000 an ounce, before leveling off for awhile.
But, I'll also factor in a possible gold bubble. If gold does not correct soon, it'll set off a self-perpetuating frenzy that will pump it up close to $2000 in two to three months before bottoming out below $1000 an ounce. If this happens, I'll try to cash out at the start of the bubble burst, and then bargain-hunt in a few months. Signs of the bubble timeline include:
1. No real corrections, and a continuation of this rediculously dramatic climb for another two or three months 2. Seedy operations switching from offering to buy your gold to offering to sell it to you 3. Talk of the collapse of the dollar and reasons to buy gold shifting from punditry we read on our sites to places like CNN and MSNBC (and no, FOX doesn't count!)
If the third happens, then investors may get involved, leading to a larger bubble, perhaps indeed breaking $2000 or $2500. Just remember, the higher they climb, the greater the fall...
Improperly Cleaned, Our passion for numismatics is Genuine! Now featuring correct spelling.
The Chicago Mercantile Exchange (CME) increased margin requirements for silver futures contracts to $6,500 from $5,000 per contract (a contract is 5,000 ounces of silver). You can read the full press report here. The price increase will take place after market close today. Immediately after the news, silver fell. Then gold fell. The blogosphere viewed the CME's move as a last-ditch effort to keep metals' prices down (silver is up 66% this year... gold jumped 27%). It's not... The CME's actions were intelligent. First, considering silver's soaring price, a margin increase makes sense. Traders should be required to post more collateral to control a higher dollar amount of silver. Second, silver was in a speculative frenzy. All of this new money needed to learn a lesson: The metals market is volatile. The CME's actions led to a marketwide rout. Even Treasurys, the traditional safe-harbor, plunged.
The Chicago Mercantile Exchange (CME) increased margin requirements for silver futures contracts to $6,500 from $5,000 per contract (a contract is 5,000 ounces of silver). You can read the full press report here. The price increase will take place after market close today. Immediately after the news, silver fell. Then gold fell. The blogosphere viewed the CME's move as a last-ditch effort to keep metals' prices down (silver is up 66% this year... gold jumped 27%). It's not... The CME's actions were intelligent. First, considering silver's soaring price, a margin increase makes sense. Traders should be required to post more collateral to control a higher dollar amount of silver. Second, silver was in a speculative frenzy. All of this new money needed to learn a lesson: The metals market is volatile. The CME's actions led to a marketwide rout. Even Treasurys, the traditional safe-harbor, plunged.
OK, in isolation I can see the above point. But let's consider that commodities like cotton, sugar, coffee, wheat, etc. have gone bonkers in the past several months, and some parabolic in the past few weeks, even outdistancing silver. Look at wheat back at the end of the summer when it doubled in one month. Why isn't the CFTC concerned about adding additional margin requirements to crazy cotton (and whacky wheat) which had been limit up for consecutive days in a row? Why just silver? Was it because silver is a money alternative and closely linked to gold and liquidity ratios that many traders and investors follow? Was it because JPM and Co. are still massively short and bleeding profusely were asking for a helping hand to punish the evil longs? Was it because this was also a TBond auction week and the govt needs some capital flows into bonds for a few days? Or was it because the G20 is meeting today and tomorrow and having silver and gold run wild while the US dollar craters (and other currencies were rising) is not good for TEAM G20? What president wants to see gold and silver stampeding over his currency while attending a G20 summit? The CFTC has ignored any of the evidence presented to them showing silver manipulation over the past decade. So no big surprise if a favor was called in from several fronts to do something about silver. They did it against the Hunts when the bankers and commericals screamed for help. Why not Tuesday? But as Sinclair has noted, rising margin requirements are the sign of a strengthening bull market, not an impending bear. The banks and connected funds are probably making out big time on their agricultural longs. The CME wouldn't want to spoil that party just yet.
I agree that the CME's actions were intelligent....in order to accomplish all those goals stated above as well as ending silver's run for the time being. Note that $30 besides being a round number is a key "inflation adjusted" resistance line leftover from the 1980 chart. Next two inflation adjusted resistance pts are $64 and $140 (=to 1980 all time high)
Roadrunner...they have raised margin requirements on MANY commodities over the years.
As I also stated before, even more dramatic is when they halt BUYING in the fornt month except for short covering. I've seen that done quite a few times! Other than the shorts, no one likes to see it happen...but ya know...everyine gets it! I've been long pork bellies when it was done a few times and I understood loud and clear what they were doing. But they never say you have to sell. That would be just plain un-American.
That stuff is way over my head, but nobody appreciates knowledge and insight into the market more than me. One of these days it will all sink in. In the meantime , I don't see a target. I see a mentor or two. You fellas rock. Thank you.
However, I was always wondering about that "manipulation" talk. Especially after the CFTC commissioner came out and agreed that it was being manipulated. That, got me thinking about a market reaction once the manipulation was decreased.
Hopefully Tuesday's and Wednesday's action will keep the speculative money on guard.
Very good post! I agree a correction is coming,but the fundamentals have not changed. More $$ chasing limited assets. I am waiting for the mother of all corrections. You will know it because gold and silver paper prices will be cut in half. Then the BIG BOYS step in and take physical gold&silver from us that sell into a falling market that will appear to have no chance of recovering. Capitulation. Just my opinion.
<< <i>Very good post! I agree a correction is coming,but the fundamentals have not changed. More $$ chasing limited assets. I am waiting for the mother of all corrections. You will know it because gold and silver paper prices will be cut in half. Then the BIG BOYS step in and take physical gold&silver from us that sell into a falling market that will appear to have no chance of recovering. Capitulation. Just my opinion. >>
I agree but it might get cut in half to about $80 an ounce though when it comes.
Then the BIG BOYS step in and take physical gold&silver from us that sell into a falling market that will appear to have no chance of recovering. Capitulation.
Na just give em back their paper. You think you will pry my physical gold from me. Let it drop.
Roadrunner...they have raised margin requirements on MANY commodities over the years.
As I also stated before, even more dramatic is when they halt BUYING in the front month except for short covering. I've seen that done quite a few times! Other than the shorts, no one likes to see it happen...but ya know...everyone gets it! I've been long pork bellies when it was done a few times and I understood loud and clear what they were doing. But they never say you have to sell. That would be just plain un-American.
I can understand the method and why it needed to be done at some point for silver. But did any other high flying commodities that have outperformed silver had their margins raised in the past 4 months, or is silver the only one? Are the commodities being treated equally? And the timing on Tuesday with all the other events of this week almost seems like a set up. Silver has been in lock down for much of the past 4 years. I guess they were surprised at how quick it could run when the JPM handcuffs were taken off. They allowed silver to take its first baby steps past $21 in several years and they got one giant step instead. Simon sez do this.....NOT THAT!
No other commodity ran up 50% in a month! That's the whole story.
Look, I'm not bashing silver. I'm merely saying that it went too, high too fast. Some of you don't like to hear that because you own it. Be cool! This isn't the end of the metals run...but every big move must correct in order to let off steam and open the door for new buyers. I have NO idea where silver is going but I am nowhere near as bullish as some here. $30 seems plenty high to me for a long time. Prove me wrong...it's no loss to me.
There are two forum members that I read every one of their words of advice with care and SG is one of them. I'm reading his followup comments as tempering and I've been impressed at how well Ag has held up after the initial selloff in the face of a slightly strengthening dollar and the China interest rate scare. I'm starting to think the dip isn't going to be as deep as we would normally expect (rule of thumb is a 50% retracement of the major move). --Jerry
<< <i>Jerry....thanks...but I still think it's going to see $23-25.
Again....it's my opinion. >>
If $26 doesnt hold it may see $25 very quickly. Nice trade. MJ
Walker Proof Digital Album Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
i still got my 7 40s and 1 90 half might be willing to cash in for about 35. but unsure if its done at 27.00 oz. I still think we will see it clear 30 by end of November. Then it will give back some.
Founder of the NDCCA. *WAM Count : 025. *NDCCA Database Count : 2,610. *You suck 6/24/10. In memory of Tiggar 5/21/1994 - 5/28/2010
Numismatist. 50 year member ANA. Winner of four ANA Heath Literary Awards; three Wayte and Olga Raymond Literary Awards; Numismatist of the Year Award 2009, and Lifetime Achievement Award 2020. Winner numerous NLG Literary Awards.
No other commodity ran up 50% in a month! That's the whole story.
After rechecking the numbers: wheat went up 100% this year from July to 1st week in August. Oats, cotton, and sugar all did about 50% in one month. Best silver did was 26% this past month. So why did the tiny silver market merit a margin increase when those other much larger markets did not? (rhetorical question). The wheat chart went parabolic in early August and hopefully the CME applied a margin increase to it.
In any case, yes a good call for a short term correction. The inflation trade is out for the time being.
Comments
Will the increased margin requirements increase the demand for physical silver as an alternative to paper silver? Remember the high premiums physical metals brought back in late 2008?
Just wondering.
TD
<< <i>define "done"
back to $20?
Back to $10? >>
I see.. $23.
The chart looks like a speculative blowoff.
We need a fundamental reason to keep the momentum train rolling.
<< <i>
I see.. $23.
The chart looks like a speculative blowoff.
We need a fundamental reason to keep the momentum train rolling. >>
The world won't run and the factories will shut down without silver and due solely to the manipulation
there is less silver in the world than gold.
No matter how high silver goes there will be little decrease in demand and little increase in supply. There
is no resistence above $24 which appears to be behind us. China isn't gioing to stop growing even if we
never fix our schools or ways. Much of the world's silver supply is illusory and will evaporate if trhe status
quo is upset. The government can't legislate change out of existence and you can't fool mother nature.
There has to be a reckoning in thelong run and the longer it's put off the more destructive and potentially
catastrophic it will be.
Generally, you get a second chance to get out though and save some profit, so you better be smart enough to a least get that right.
This discussion reminds me so much of everyone in Florida talking about permanent 20% annual appreciation in real estate. That was of course a long time ago. Two and a half years. Having worked Wall Street for many years I was reminded then and am reminded in this discussion of how well we all kid ourselves. Me included.
I have been the beneficiary of many a short squeeze using out of the money calls in the short term. When I was trading (I am out of that thank goodness) I would spend most of my time researching looking for this sort of situation.
Most of us learned this game as children. It's called musical chairs. It's great to be someone who carries their own chair but it is best to be that one with their finger on the button of the music box.
Thinking Silver will crash is insane. Gold and silver will remain high for the next few months until the all the governments of the world straighten themselves out.
Silver is only up .77 this morning.
Silver has just about made up for its losses in the afternoon. That to me shows that it overcame yesterday's obstacles and is ready to run on for a while. I understand what is being said here but silver has been held down too long and is ready for a breakout. The world is too big now for one event to hold the demand down.
keep on stacking, folks. It's going to be a lot shorter time, this time 'round, 'til you see another run like this, not another 30 years.
Well, market opened up .69 and is showing some strong signs so far. We will see.
<< <i>He did make a great call on the MLP gas pipe companys, which are great and look like they have more to go, so he probably right on this call too.
Generally, you get a second chance to get out though and save some profit, so you better be smart enough to a least get that right.
Ahhhhhhhh....someone remembers this. Good recollection! BTW, I still own about six of them.....locked in yields in the 12-18% range, the stocks have gone up 2x-3x and they are raising their divdends once or twice a year.
Let's see...Linne energy (LINE) went to under $12...20% dividend. NOW it's around $37! Most of the stock I bought was in the $16 range. So what's my total return? You figure it out...I'll just collect the 17% that I'm getting.
That's my business...making $$ for clients. Watching silver and gold get manipulated is a muse to me. I like watching and picking a spot to trade once in a while.
<< <i>
<< <i>He did make a great call on the MLP gas pipe companys, which are great and look like they have more to go, so he probably right on this call too.
Generally, you get a second chance to get out though and save some profit, so you better be smart enough to a least get that right.
Ahhhhhhhh....someone remembers this. Good recollection! BTW, I still own about six of them.....locked in yields in the 12-18% range, the stocks have gone up 2x-3x and they are raising their divdends once or twice a year.
Let's see...Linne energy (LINE) went to under $12...20% dividend. NOW it's around $37! Most of the stock I bought was in the $16 range. So what's my total return? You figure it out...I'll just collect the 17% that I'm getting.
That's my business...making $$ for clients. Watching silver and gold get manipulated is a muse to me. I like watching and picking a spot to trade once in a while. >>
I have no clue about any of this, but it is always good to see you step up to the podieum and let that trumpet rip!
hope all is well on your end Jay, always good to see you popup.
Go BIG or GO HOME. ©Bill
<< <i>
<< <i>He did make a great call on the MLP gas pipe companys, which are great and look like they have more to go, so he probably right on this call too.
Generally, you get a second chance to get out though and save some profit, so you better be smart enough to a least get that right.
Ahhhhhhhh....someone remembers this. Good recollection! BTW, I still own about six of them.....locked in yields in the 12-18% range, the stocks have gone up 2x-3x and they are raising their divdends once or twice a year.
Let's see...Linne energy (LINE) went to under $12...20% dividend. NOW it's around $37! Most of the stock I bought was in the $16 range. So what's my total return? You figure it out...I'll just collect the 17% that I'm getting.
That's my business...making $$ for clients. Watching silver and gold get manipulated is a muse to me. I like watching and picking a spot to trade once in a while. >>
Hi Jay, Steve here. What are your evaluations on what transpired yesterday and what seems like a slight recovery.? Is it just profit taking or what?
Look....silver ran TOO MUCH, TOO FAST. A true bull market doesn't go up 50% in 10 days. You had people shorting the market every day and blowing their brains out when the hedgies started buying. It almost looked like a setup.....pragmatists shorting...predators squeezing them by running prices up every day. I have no idea who would buy at $29! It was $20 last month.
Certainly everyone was watching for a break. Trust me, I talk to some of the largest bullion dealers and experts in the cash markets. What triggered it? Well, I'm sure the 30% margin rise was one trigger, as was +$2.30 in a DAY, but I think one noxious fart in the slver pit could have done it, It NEEDS to correct....and $5-7 wouldn't surprise me at all. Commodities markets get ahead of themselves, especially the volatile ones because the leverage becomes so great that nerves, fear and margin calls start to take over the fundamentals. I am not a silver basher...I just see something that went way too far too fast. I am still a precious metals bull...and have been since 2002. Prior to that I was bearish from 1980 to 2000. I mean, a real bear...I would constantly dissuade clients from going into metals after reading some guns&gold newsletter. Ther was just no reason to buy...the USSR had collapsed, you had all the old republics selling gold to get off their feet and Europe was liquidating to save their economies. In fact, one of the things that first got me to start watching more closely for an entry poin(two years in advance!) was when I saw France, Germany and Great Britain sell gold in the very late 1990's. That was a sign of the end of an era to me...that's my thinking. It took gold almost 3 years of basing to finally exhaust the bear. Look at the long term charts and you'll see how it languished down between $275-310 forever. That's when my technical work finally put in a buy point on a weekly close above $318.
I was never a "sky is falling" buyer and I'm not an "end of the world" seller. I shouldn't have used the word "DONE" and I stated so later. I just meant that this party was getting busted. Hell...I'm still not sure I'm right! This market is swinging $2.00 a minute! These are moves of historic proportion! But that's also a sign of the end of a fast and furious move. Increased and extended volatility speaks loudly if you watch commodity markets for years and years. It's like the big finale at a fireworks show. Let's see what happens.
I hope EVERYONE makes money no matter what their position.
Thanks for your insight.
<< <i>Silver is cheaper than gold. People are now buying because of that.
Thinking Silver will crash is insane. Gold and silver will remain high for the next few months until the all the governments of the world straighten themselves out.
Silver is only up .77 this morning. >>
The words of a bull...Ye spake too boldly and too soon.
Now silver is down 1.80 after being up. You think that's good action? You think it's insane?
SLV + $1.95% or so today
ZSL (double short) - 3.25% or so today
Comex close over close was down as SG stated.
I also TRULY appreciate any words SG offers whether I agree with him or not. Great stuff. I aslo hope we all find a way to make $$$$. MJ
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
As for gold, I think it's also rising too fast. It should rise, but not this much. It'll correct, but then I predict it will return where it is now in four to six months, rising further but not all the way to $2000 an ounce, before leveling off for awhile.
But, I'll also factor in a possible gold bubble. If gold does not correct soon, it'll set off a self-perpetuating frenzy that will pump it up close to $2000 in two to three months before bottoming out below $1000 an ounce. If this happens, I'll try to cash out at the start of the bubble burst, and then bargain-hunt in a few months. Signs of the bubble timeline include:
1. No real corrections, and a continuation of this rediculously dramatic climb for another two or three months
2. Seedy operations switching from offering to buy your gold to offering to sell it to you
3. Talk of the collapse of the dollar and reasons to buy gold shifting from punditry we read on our sites to places like CNN and MSNBC (and no, FOX doesn't count!)
If the third happens, then investors may get involved, leading to a larger bubble, perhaps indeed breaking $2000 or $2500. Just remember, the higher they climb, the greater the fall...
The dollar will once again recover in the next year.
By this time next year there will be many more of them.
My Adolph A. Weinman signature
The Chicago Mercantile Exchange (CME) increased margin requirements for silver futures contracts to $6,500 from $5,000 per contract (a contract is 5,000 ounces of silver). You can read the full press report here. The price increase will take place after market close today. Immediately after the news, silver fell. Then gold fell.
The blogosphere viewed the CME's move as a last-ditch effort to keep metals' prices down (silver is up 66% this year... gold jumped 27%). It's not... The CME's actions were intelligent. First, considering silver's soaring price, a margin increase makes sense. Traders should be required to post more collateral to control a higher dollar amount of silver. Second, silver was in a speculative frenzy. All of this new money needed to learn a lesson: The metals market is volatile. The CME's actions led to a marketwide rout. Even Treasurys, the traditional safe-harbor, plunged.
The blogosphere viewed the CME's move as a last-ditch effort to keep metals' prices down (silver is up 66% this year... gold jumped 27%). It's not... The CME's actions were intelligent. First, considering silver's soaring price, a margin increase makes sense. Traders should be required to post more collateral to control a higher dollar amount of silver. Second, silver was in a speculative frenzy. All of this new money needed to learn a lesson: The metals market is volatile. The CME's actions led to a marketwide rout. Even Treasurys, the traditional safe-harbor, plunged.
OK, in isolation I can see the above point. But let's consider that commodities like cotton, sugar, coffee, wheat, etc. have gone bonkers in the past several months, and some parabolic in the past few weeks, even outdistancing silver. Look at wheat back at the end of the summer when it doubled in one month. Why isn't the CFTC concerned about adding additional margin requirements to crazy cotton (and whacky wheat) which had been limit up for consecutive days in a row? Why just silver? Was it because silver is a money alternative and closely linked to gold and liquidity ratios that many traders and investors follow? Was it because JPM and Co. are still massively short and bleeding profusely were asking for a helping hand to punish the evil longs? Was it because this was also a TBond auction week and the govt needs some capital flows into bonds for a few days? Or was it because the G20 is meeting today and tomorrow and having silver and gold run wild while the US dollar craters (and other currencies were rising) is not good for TEAM G20? What president wants to see gold and silver stampeding over his currency while attending a G20 summit? The CFTC has ignored any of the evidence presented to them showing silver manipulation over the past decade. So no big surprise if a favor was called in from several fronts to do something about silver. They did it against the Hunts when the bankers and commericals screamed for help. Why not Tuesday? But as Sinclair has noted, rising margin requirements are the sign of a strengthening bull market, not an impending bear. The banks and connected funds are probably making out big time on their agricultural longs. The CME wouldn't want to spoil that party just yet.
I agree that the CME's actions were intelligent....in order to accomplish all those goals stated above as well as ending silver's run for the time being. Note that $30 besides being a round number is a key "inflation adjusted" resistance line leftover from the 1980 chart. Next two inflation adjusted resistance pts are $64 and $140 (=to 1980 all time high)
roadrunner
Interesting comments. How have you been? It's been a while!
Best,
Eric aka Magikbilly
As I also stated before, even more dramatic is when they halt BUYING in the fornt month except for short covering. I've seen that done quite a few times! Other than the shorts, no one likes to see it happen...but ya know...everyine gets it! I've been long pork bellies when it was done a few times and I understood loud and clear what they were doing. But they never say you have to sell. That would be just plain un-American.
``https://ebay.us/m/KxolR5
<< <i>It's never fun to try to catch a falling knife... :-P >>
However, I was always wondering about that "manipulation" talk. Especially after the CFTC commissioner came out and agreed that it was being manipulated. That, got me thinking about a market reaction once the manipulation was decreased.
Hopefully Tuesday's and Wednesday's action will keep the speculative money on guard.
What's your take on other PM's, should we start drinking
it because gold and silver paper prices will be cut in half. Then the BIG BOYS step in and take physical gold&silver from us that sell into a falling market that will appear to have no chance
of recovering. Capitulation. Just my opinion.
<< <i>Very good post! I agree a correction is coming,but the fundamentals have not changed. More $$ chasing limited assets. I am waiting for the mother of all corrections. You will know
it because gold and silver paper prices will be cut in half. Then the BIG BOYS step in and take physical gold&silver from us that sell into a falling market that will appear to have no chance
of recovering. Capitulation. Just my opinion. >>
I agree but it might get cut in half to about $80 an ounce though when it comes.
of recovering. Capitulation.
Na just give em back their paper. You think you will pry my physical gold from me. Let it drop.
Box of 20
As I also stated before, even more dramatic is when they halt BUYING in the front month except for short covering. I've seen that done quite a few times! Other than the shorts, no one likes to see it happen...but ya know...everyone gets it! I've been long pork bellies when it was done a few times and I understood loud and clear what they were doing. But they never say you have to sell. That would be just plain un-American.
I can understand the method and why it needed to be done at some point for silver. But did any other high flying commodities that have outperformed silver had their margins raised in the past 4 months, or is silver the only one? Are the commodities being treated equally? And the timing on Tuesday with all the other events of this week almost seems like a set up. Silver has been in lock down for much of the past 4 years. I guess they were surprised at how quick it could run when the JPM handcuffs were taken off. They allowed silver to take its first baby steps past $21 in several years and they got one giant step instead. Simon sez do this.....NOT THAT!
roadrunner
Look, I'm not bashing silver. I'm merely saying that it went too, high too fast. Some of you don't like to hear that because you own it. Be cool! This isn't the end of the metals run...but every big move must correct in order to let off steam and open the door for new buyers. I have NO idea where silver is going but I am nowhere near as bullish as some here. $30 seems plenty high to me for a long time. Prove me wrong...it's no loss to me.
Again....it's my opinion.
Gold $1370 down $40
Silver $26.16 down $1.52
Platinum $1684 down $70.
The move appears to be across the board and not just silver.
<< <i>Jerry....thanks...but I still think it's going to see $23-25.
Again....it's my opinion. >>
If $26 doesnt hold it may see $25 very quickly. Nice trade. MJ
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
<< <i>The move appears to be across the board and not just silver. >>
BST Transactions: DonnyJf, MrOrganic, Justanothercoinaddict, Fivecents, Slq, Jdimmick,
Robb, Tee135, Ibzman350, Mercfan, Outhaul, Erickso1, Cugamongacoins, Indiananationals, Wayne Herndon
Negative BST Transactions:
Once this little dip is done, you will not get any eagles on ebay for less than $50 and that could be as early as next week.
<< <i>Jerry....thanks...but I still think it's going to see $23-25. Again....it's my opinion. >>
Well, I've been quiet. soon as I posted, downness continued...you're the expert, not me. thanks, --Jerry
<< <i>When the Saint speaks, the market listens:
Gold $1370 down $40
Silver $26.16 down $1.52
Platinum $1684 down $70. >>
IT'S HIS FAULT!!!
BURN HIM!!!!!!!
Now... make it go back up.... :-)
LM-ANA3242-CSNS308-MSNS226-ICTA
I knew it would happen.
After rechecking the numbers: wheat went up 100% this year from July to 1st week in August. Oats, cotton, and sugar all did about 50% in one month. Best silver did was 26% this past month. So why did the tiny silver market merit a margin increase when those other much larger markets did not? (rhetorical question). The wheat chart went parabolic in early August and hopefully the CME applied a margin increase to it.
In any case, yes a good call for a short term correction. The inflation trade is out for the time being.
roadrunner
<< <i>
<< <i>When the Saint speaks, the market listens:
Gold $1370 down $40
Silver $26.16 down $1.52
Platinum $1684 down $70. >>
IT'S HIS FAULT!!!
BURN HIM!!!!!!! >>
even lower now...
buy the dips
I think that unless something very unusual comes out of Europe there's another 5-10% to the downside.
I take no glee. Stocks are getting smashed along with commodities. However, the stock market is not expensive by historic measures.