Silver, etcetera

118
Sun, Jul 13, 2014 - 2:41pm

When I read on matters to do with silver I often find myself entertaining doubts. Now that is entirely to be expected when talking about anything to do with all financial markets, where bets are essentially being placed on the outcome of unknown future events.

But markets are a little different. Let me explain. First, here is a article by the recently deceased and very sensible Puck T Smith, blogger and member of the TFMR metals forum and website:

>>Local Coin Shop Update

Went to pick up a few Franklin Halves today. There were at least ten people waiting outside the shop when the doors opened. After they opened up, within 15 minutes, the place was packed. At least thirty or forty people. They had three or four more people behind the counter than in the past. Looks like it was some of the regular guys' wives helping out. While I was waiting for one of the guys to pick my Franklins out of his "junk" bucket they moved three monster boxes of ASEs and another lady picked up thirty 10 oz bars of silver. I think I overheard at least twenty gold eagle and gold maples buys as well. Of everyone in the shop there were only two or three people selling, the rest were buying and buying big.

This is in the Peoples' Republic of Maryland. What it must be like in the red states, I can't imagine.

Something has got to give soon.<<

Puck posted that blog entry on Saturday January 12, 2013. (His blog is worth reading through over a period IMO) It described a busy time for the retailers of silver in his local district, with retail buying from the trade at a brisk pace.

So let us now look at a chart of silver around that time:

I left the red crosshairs on the day in question, well the following Monday, since Saturday the 12th was a closed market day. We can see that this was not the best time to buy silver heavily, though Puck describes more a regular small type purchase for himself, I reckon that the other customers present who bought three monster boxes of silver eagles and the thirty 10 oz bars on that weekend, with spot silver at 30.91, may have suffered some angst when silver traded at 18.18 less than six months later. A decline of 42% in such a short time is seriously debilitating financially speaking, and probably bad for the physical state of health too.

With silver now at 21.46 those unfortunate people are running, if they have not unloaded at a serious price low, at approximately a 30% loss, not including price premia over spot on their coins or bars.

So it would appear that retail, the small speculator trader, was wrong in this case. This is an adage of sorts, "swim with the whales", rather than with the "minnows", when trading. Certainly the size of funds traded by large traders would at face appear likely to be better informed and more thoroughly researched than small money risked by the individual small trader.

Or is this the case?

This weekend I noted that the trader George Soros in recent declaration disclosed acquisition of mining stocks, and the source was considering that this is a positive piece of information. I am not so sure. It could be. But what I mean is - if I had been aware of this on the day, or even the week that Soros bought the stocks, I might have considered jumping aboard for a speculative ride. But now, later, not so much. Billionaires are like that. For some reason they don't want to make it easy on us little traders. Another piece of information, one which did not come to my notice this weekend, is the kind where a well known, famous, respected type hedge fund manager does an interview and declares "his book". Kyle Bass comes to mind, Hugh Hendry might be another who I have great respect for.

However whenever I read these people saying things like "the Yen is going to bomb" or whatever, I do not rush out to put on trades based on this "good advice". You see, I never forget that while it may once have been "good advice" when they did the trade, now is later, much later, and prices are not what they were at the time opportunity knocked for Kyle or Hugh. So it's all very interesting, but it's not actionable, and it's not fresh, and every dog in town who wanted to play already has had a bite of that particular bone.

In speculation, following public statements is a way to lose not gain money.

What would be interesting to me might be learning that the local coin shop did a brisk business buying from retail back into stock. If I were to buy at the same price and time I would be on the other side from retail, and more optimistic. In matter of fact, my optimism for a good trade would be pretty much inversely correlated to the pessimism of the small traders as a group. But that, while a step forwards, is still not enough. This really is a tough business, and every newcomer has to learn that the same expensive way I suppose.

Can I bring anything to the table today which is not already in the public domain? There is a lesson of sorts in the above anecdote I guess, but it's hardly rocket science. If I post a few charts, would that seem like fresh information? Charts are ten a penny after all, and there are lots of other charts out there waiting to be looked at, right? The problem with charts is ... well ... anyone can do charts!

So let me put that notion to bed right now. Charts are a picture of information in visual form. They are communication ... language! All of the variations of meaning or emphasis in several sentences are possible with a chart. If I show one trendline on a chart does that make it special. No? Yes? Consider this: if I did that, show one trendline, one only I mean, then why did I not show other trendlines too? There is much to see in a chart if the looker is prepared to look really carefully. I can look at a chart for several minutes, really intently - to the point where if called by a family member it might take a couple of seconds for my conscious brain to register what my ears had heard.

Anyway, enough of that. All I want to say is that there are varying levels of concentration and this is something that matters, but is invisible and unnoticed by a passing glance.

Now go back to the chart you just looked at above and try to explain to yourself why it is that you didn't instantly notice that the people in Puck's LCS that day bought their monster boxes of silver (1) right below the price low of October 3 months prior, and (2) with an interim lower high in place end of November-early December one month prior? Maybe you saw that in the first passing glance? If not, how carefully did you actually "look"? For how long?

One thing we can control in today's markets is ourselves and our actions, and particularly the care with which we acquire "fresh" information. Provided we take the trouble to actually do this of course!

It's time for another silver chart:

Above is the grid for weekly silver. Not every horizontal works. Not every vertical works. But many do. Crosses of the two have funny effects on the silver price ... sometimes but not always. There is a "form" that is not obvious. Looking hard will only aid but never cure the need for more information. That partial view is all the information this chart gives. Looking through a glass darkly, as the scribe said millennia ago.

Next chart:

Above is a silver harmonic projection forecast, together with an alternative "inversion of cycles" scenario shown. The dates are shown. It's more quantum physics than technical analysis. But if I had not made this "chart" myself, and saw it here as if I were a reader, I would have to take a vertical ruler and compare every wiggle of the redline with every turn of the price, to evaluate the amount of lead or lag for earliness or lateness of the forecast, also to see if "bigger" turns were found better or worse than "little" turns. But you could just read the dates I suppose .... much depends on what you want, doesn't it?

While I am at it, here is another harmonic which works as well for silver, so if there is a "flip" it would probably take the form of a jump in price behaviour from the above towards the next scenario or back.

This is a short term regularity which has emerged, just for a while, in silver and which does not appear to have gone away quite yet.

One thing I maybe should say about the small investor buying their first precious metal. A lot depends upon when exactly you become aware of reasons that motivate you to buy this stuff. I mean, if you never had any, and become aware that you think you should, the obvious thing might appear to be to go out and get some fast. Usually the advice suggests that some "insurance" should be got quickly, if none is already owned. But there is a strange thing about financial markets you need to know. It is that the passing of knowledge tends to be after the time it was most useful. Like for the hedge fund manager interviews I described above.

I merely remind that big things happen slowly, and there are a lot of red faced people out there with "the end of the world is nigh" sandwich boards and placards gathering dust in the back of the wardrobe. So it's usually a good idea to take time to look around before doing anything in markets. How much time? That would be "fresh" information. Those folks are reliable people. They will surely tell you afterwards! Otherwise look harder at your charts or find another way.

What advice can I offer newcomers that does not appear "cryptic"? It's actually not cryptic, you just need to get sensitized to what matters most to "get" that!

Well you could:

divide the amount you are going to spend by 4.

Put half of it away in cash for when the 1st quarter disappears in "tuition cost".

Since 1/4 is about to disappear, change step one and divide by 8!

Then it is good to multiply your reading time allocation by 4.

Next I suggest reading Zen in the Art of Archery, or Mastery which are nothing to do with finance, and everything to do with it!

Next read my review in this blog of Extraordinary Popular Delusions and The Madness of Crowds,

and buy a copy (for repeated reading) of Reminiscences of A Stock operator for yourself.

Then study things called "risk management" and "money management" as applied to traders in financial markets. I like Robert Rotella's handling of it in the Elements of Successful Trading. But there are plenty of sources, eg Murphy or any of the better TA tutorial books.

Finally read up on rogue traders, and find out what they did, and don't do it!

Have a great weekend folks!

Argentus Maximus

The author posts daily commentary on the gold and silver markets in the TFMR forum: The Setup For The Big Trade. More information about the author & his work can be found here: RhythmNPrice.

About the Author

  118 Comments

Spartacus Rex
Jul 14, 2014 - 1:54am

@lakemike49

Came in in '63 .

Looking for dust bunnies?

You were supposed to be getting those damned GRID SQUARES. LOL!

Cheers & Semper Fi, S. Rex

lakemike49
Jul 14, 2014 - 2:04am

now i will do one for myself

i have never felt so out of touch with my country, and that is alot to say. i was 18 in 1968 , hell i think my generation fucked this up . but not like now , every word seems to be a lie no rule of law , i may not speak well but never think that i am not awake and mad , i only think i can do one thing and one thing only infuance those around me , can not spell but get me in a room and i will shout , and speke truth

sorry for the rant get so dam mad have a hard time expressing myself

lakemike

SS121
Jul 14, 2014 - 2:05am

@tyberious re: the PhilosophersOfTheMatrix

They put out the narrative of the owners of the system.

Always scenarios where the "system" (Matrix) fixes itself and continues on with the "system" in control.

A centrally controlled SDR is just the "system" trying to save itself by their replacing the USD with something completely 'nation'less. Something they completely control.

Even when they do mention the word "silver" it is always to describe their dreams of how "silver" will fit into the "system"... after the "system" has fixed itself.

Here is a picture of JC Collins, along with CNBC, and Reuters, and ZH and Bloomberg, etc... they're all the same.

Remember the Agent Smith to Neo quote: "We're willing to wipe the slate clean, give you a fresh start" (debt forgiveness, appealing to the world to get behind the new Reserve Currency. Stick around, it won't be long.)

Agent Smith is the Matrix equivalent to the system's JC Collins. And anybody else who works to promote the narrative that the "system" (matrix) is going to fix itself and continue on without Silver and Gold returning to their Monetary Role. Are they polished? Yes. Are they disciplined in their relentless pumping of pro-"system" BS? Yes. Will that matter? No.

The "system" is dying. Only Silver and Gold are Money and the "system" is being crushed under the weight of that reality. It's a natural process, and it's nearly complete. Once this "replace the Dollar as the Reserve Currency goat-screw blows up on the launch pad, -THEN- the real fun begins!

ks

Spartacus Rex
Jul 14, 2014 - 2:15am

@ lakemike

You're expressing yourself just fine. The "generation" that F*d things was sitting in Congress and the Oval Office in July of 1965 w/ the passing of the Coinage Act of 1965 allowing the Banksters to go ape sh*t counterfeiting since no longer would there be any silver coins in circulation to redeem fiat IOU currency for, and thus the expansion of the Free Sh*t Army in LBJ's War on Poverty.

Cheers & Semper Fi, S. Rex

Spartacus Rex
Jul 14, 2014 - 2:32am

LOL!!! BOHICA

Here it comes, the Last Sale Opportunity before Gold takes off to 1380-1400

Grab the physical while you still can.

Occasnltrvlr
Jul 14, 2014 - 2:49am

(U.S.A. Only)

Redemption.

Is leaving, cowardice? Is staying, foolhardiness? Justify your opinion.

Boswell
Jul 14, 2014 - 2:50am

Any "Chart Watchers" out there?

What do you make of this $0.40 dip?

I've got an "itchy" finger! ;-)

edit: "Hi Rex!"

Spartacus Rex
Jul 14, 2014 - 2:54am

@ Boswell

Don't forget all the disappointing Earnings coming out! Better scratch the itch sooner better than later.

Cheers. S. Rex

Spartacus Rex
Jul 14, 2014 - 2:56am

@ Occasnltrvlr (U.S.A. Only)

Who's asking / needs to know?

Boswell Spartacus Rex
Jul 14, 2014 - 2:59am

@ Rex

I hear ya...

I was waiting for a dip all last week! ;-(

With my order size, we're only talking $5-$10 either way.

The "London Boys" will be up in a few minutes...

Spartacus Rex
Jul 14, 2014 - 3:04am
Occasnltrvlr
Jul 14, 2014 - 3:06am
RockerBoxer Boswell
Jul 14, 2014 - 3:06am

The "London Boys" made in

The "London Boys" made in China LOL!

Spartacus Rex
Jul 14, 2014 - 3:11am

@ Occasnltrvlr LOL!

Careful, I am "very powerful" in case you didn't hear. LMAO!

Boswell
Jul 14, 2014 - 3:19am

Consider it...

"Scratched!" ;-)

(Watch the price reallly drop now)

Boswell
Jul 14, 2014 - 3:21am

Consider it...

Hmmm?

Posting finger acting up too!

Spartacus Rex
Jul 14, 2014 - 3:22am

@ Boswell Nice 2 Hat Tipper 4 U

Come On, U Know you will never regret the purchase so relax and enjoy.

Cheers, S. Rex

Occasnltrvlr
Jul 14, 2014 - 3:41am

Mr. Rex

But, for real, I am interested in your opinion.

St. Ann states plainly that our government has been overtaken, a "fait accompli". I agree with her assessment.

If so, then wouldn't one move out, for the hope of more effectively redressing this grievance?

What do you (and others) think?

RockerBoxer
Jul 14, 2014 - 3:43am

Borderland!

A tune to start the early morning with, have fun this week, borderland the theme!

Nortec Collective Presents: Bostich + Fussible - Radio Borderland
Spartacus Rex
Jul 14, 2014 - 4:16am

@ Occasnltrvlr

I am not sure I follow your line of thinking/reasoning there.

How would "moving out" give anyone, anymore effective standing for petitioning for a redress of grievances?

The only reason our gov't has been hijacked is because they are all paid in Fiat Ponzi Bux, and the only ones who give these clownbux any value whatsoever is We The People, with our inexplicably asinine collective "faith" in counterfeited 100 to 1 leveraged fiat paper.

When the greed for temporary gain, is finally overwhelmed by self preservation of assets and wealth, and people once again re-learn why Honest Money (Gold & Silver Coin)came into existence in the first place and survived throughout the Millenia, the perpetrators of fraud will lose all their power & prestige.

The Key to taking back Our Country, is simply taking back Our Honest Money and the power and Liberty that naturally comes with same.

Hopefully enough Americans will wake up and do so why it is still there to be had, rather than wait until China, Russia, India, ME/OPEC beat everyone in America to it.

But hey, The LORD gave each of us Free Will Choice, as well as commanding Us to use Honest Weights and Measures, so to Each their own Consequences, whether in this Life or the Hereafter.

I'm covered, R U?

Cheers & Semper Fi, S. Rex

Occasnltrvlr
Jul 14, 2014 - 5:22am

Mr. Rex

I think I am covered, time will tell.

Very good, and pertinent question, how can one redress grievances from outside the borders?

I don't disagree: honest money restores an honest people.

Is this feasible? Now? Today?

Spartacus Rex
Jul 14, 2014 - 5:31am

@ Occasnltrvlr

re "feasible". Sure why not?

I use Honest Money all the time and have a lot of fun doing so.

Where do you see any feasible difficulty?

Cheers, S. Rex

hindsight101
Jul 14, 2014 - 5:32am
Boswell
Jul 14, 2014 - 6:52am

~ Rex

Anything below my DCA and I'm happy...

I'll be even someday soon!? ;-)


Jul 14, 2014 - 9:18am

Art vs Fiat

I like the analogy.

I am a bit of an art collector and rarely buy digital art--or prints for that matter unless they are signed by the artist. I passed on a Picasso print the other day.

I look for paintings--real paint on a real medium-- canvas, paper or wood. Not interested in prints unless I really like the image, I have an empty spot at home or the office, and I can get it dirt cheap. When I find a real painting, out goes the print and up goes the painting.

Same as my attitude about fiat. I use it when I have a need and replace it with something better when I can.

buzlightening
Jul 14, 2014 - 11:03am

It's a rank obvious OEX

misdirection Monday. Watch it all turn a 180 by tomorrow. Good place to short djx paper assets and by up assets of substance with ever devaluing frns. The volatility which will ramp up in aug thru sep will be wild.

DonShimoda metalsbyamile
Jul 14, 2014 - 11:05am

Good for you metal by a mile

Good for you metal by a mile ......

Let's not let this place turn into a another Gold is Money blog site

Island Guy
Jul 14, 2014 - 11:35am

Occasnltrvlr and Seccession

Occasnltrvlr is part of a group advocating secession of states from the union. Although many on this site disagree with him on whether this is a viable option, I think that the threat of it may have some merit in addressing the problems we all see with the country.

If states were free to leave, the tyrany of the central government and the liberal courts would be greatly restrained. They could no longer force their agenda and choices on the country, for fear that states would get fed up and leave. Frankly, I see this as a great tool in ending the Great Kensian Experiment.

Many on this site have pointed out that the South failed to win secession by force of arms in the 1860s, and the US military is much stronger today than it was then. Frankly, this is irrelevant. Any state seeking to secede would only have to employ the same tactics as Ghandi and Martin Luther King. Simply refuse to participate in the Great Ponzi any longer. Isn't that what people on this site have been advocating for years? Don't collect or pay federal taxes. Don't enforce federal rules, regulations or court decisions. Passive resistance. Remember, the federal government only rules us because we willingly do what we're told. If a few people resist and stop playing the game, they're hammered. But if an entire state quit playing along, that would be a totally different situation.

The problem would be getting everyone in a state to go along with the secession. If only a handful choose to resist, they will be crushed.

There is also the problem of the Civil War. People think that this settled the issue of whether or not states could secede. People now presume that the founding fathers intended for the union to be perpetual, with no one leaving once they joined. I doubt that this is what the founding fathers really intended, however. If some one had told the original 13 states that if they joined the union they could never leave, no one would have joined.

By the way, I was born and raised in the North, so I do not have a Southern agenda in this discussion. But I do think that this topic deserves serious discussion as a vehicle to end the Great Kensian Experiment.

metalsbyamile DonShimoda
Jul 14, 2014 - 11:43am

Thanks DonShimoda

On several occasions when i refute bullshot at TFMR, the reporter never responds , nor the rest of the community. It astounds me so for that i thank you.

I recall specifically the bombing event, where many were calling it a staged event. I had a friend, very high up with in the medical field examine the photo.His conclusions and explanations were reasonable, plausible, factual, and did not fit the conspiracy agenda established on that topic.

Not one post appeared, not 1 comment was posted, after my efforts to get answers for us all.

I notice that more and more at TFMR.

ag1969
Jul 14, 2014 - 11:44am

Yeah! Whoo hoo!

The past three weeks have had me nervous, like the world was going to break or something. But it looks like the world was fixed over the weekend and gold and silver are heading back to more "realistic" prices. Should we all still hang out?

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