We may be at the point to drop back down to the lower end of the falling wedge which should lead to NEW lows as described above. This may be an excellent opportunity to BUY FEAR on this blood-letting. BTFD
based off of how silver reacted the last time it touched the upper downward sloping trend line, too me, it looks like $34.50 is in the cross hair.
Many thanks, and hat tips, for your charts and analysis.
Look how the lime green arc acted as resistance the last few weeks. Gonna get interesting.
There is NO point trying to catch the bottom. Instead SLOWLY pyramid down, and add MORE the further it drops.
If we break 35.00, then TIMBERRRrrrrr......there would be support at 34.50, but the chart would look pretty darn FUGLY. TIME would be needed to heal THOSE WOUNDS.
The first leg down was 39.00 to 35.00; 9 bar duration;
The second leg was 38.00 to 34.50; 6 bar duration;
The third leg is 36.80 to????; duration??
DITTO strategy for Silver:
The great thing about markets is that you are constantly receiving information. Last week I put out a feeler bet in gold. What followed was a pretty decent rally that had gold testing its all-time highs. This morning we experienced a mini sell-off. If you bought when I did and sold this morning, you would be just about even; however, you now have a little more information to act upon.
We saw how negatively markets reacted to Bernanke’s speech, which was sufficient enough for me to lighten up a bit. It appears there’s a better chance we will see a spike move to new lows in gold, and perhaps stocks. As far as I’m concerned, this would be the absolute dream scenario. I love seeing red in gold stocks. I love it that gold has barely budged in June, yet many of the gold stocks are down 15-20%. In general, you should have your hand hovering over the buy button. This obviously doesn’t mean you should buy day after day into a correction, but it does mean you should be leaning bullish as gold stocks sell off.
I know that my perspective of being insanely bullish on gold but loving corrections more than the biggest gold bear is rare. I’ve noticed that only about 10% of gold investors think this way. Most get caught up in where their account is on a day-to-day or week-to-week basis. The reason I rarely buy options in gold or silver is that it skews your thinking. It makes you impatient. It makes you double down when you should be standing pat or selling to salvage capital when you should be buying. I don’t want a quickly approaching expiration date to dictate my thinking.
I can tell you with 99% assurance that I will be a buyer of gold if we tag the 200-day. I can also tell you with 99% assurance that I will be extra patient if we breach the 50-day. If the 50-day holds, I will be more inclined to add slowly and build a position. This is not a market you can plan for ahead of time; you must be able to take what the market gives you and adjust.
The extended correction we are experiencing is a gift that keeps on giving. People tend to get impatient in these corrections, but gold is giving you the opportunity to hop on board with as much capital as you’d like before liftoff. Even in stocks, sentiment should get pretty bearish soon enough; this will be your signal to buy. The dollar may rally to new highs while the Euro zone collapses from within; this will be your signal to sell. Just understand that in extremes, opportunities arise. Try not to get fixated on only one scenario playing out. Gold may shoot straight to $1600 from here or it can fall to $1400. No one knows. But you can invest intelligently and ensure that you maximize your profits in either scenario.
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Check out Larry boy's analysis of gold/silver/$/Dow from his very well hidden underground bunker:
So we're all aware that the COMEX has been bleeding silver as of late, now down to an ALL-TIME LOW of 27.7 million ounces of deliverable silver.
What no one knows for sure, is where this silver is going.
Per US law, the US Mint must source its silver from DOMESTIC production. Well, what happens when US mint silver sales outpace domestic production? Is it possible the US Mint is actually draining silver from the COMEX in a massive amount?
Lets take a look at the details of 2010-2011 US silver production vs. US mint silver eagle sales.
So in Q1 2011, the US Mint sold 12,429,000 Silver Eagles
Q1 2010 the US Mint sold only 8,993,500
Silver is weak. It may try to work off these oversold levels b4 heading Lower.
That's a chart I can understand!
Hi-Ho Silver wrote: Could the US Mint in fact be the culprit that is causing Blythe Blood to be flowing on the COMEX floor?
I've always held BM dear to my heart. Thanks to her, I can accumulate more for less longer. She's like my silver Viagra!
Excellent analysts on the Mint situation, I must say. It would be interesting to re-run the numbers and then include all the silver coins they mint - not just Eagles. I'm a sucker for the ATB coins.
Looks like we're back to where we were exactly a month ago (5/23) on the 5h chart @ 34.75 or so. If we close below this, were do you expect head next? I'm assuming lower, but we're only a few ticks away from that 34 mark that took us half of March to finally get through.
I've added a few Kilos of Silver at 35.00. I don't for one minute think this is the bottom, but am happy to accumulate here.
Gonna add "Buy Blood" to my handle...lol
It looks like silver has some room to run upwards.
I got out of my short at $34.90.
Probably a good idea MF. It's very oversold (which doesn't mean it can't STAY oversold), but we have a divergent double bottom on the 15/30 minute charts which will create some short-covering.
Hope you bought a bit extra on covering...lol Decent place to accumulate some physical.
Sure did......in the form of GPL and EXK.......talk about a nice rally into the close!
I am still open to the possibility of sub $34.50....which would probably mean a slide into the $33's
Several large movements in COMEX silver inventory to report for yesterday 6/22/2011.
COMEX Registered silver supplies have made a NEW all-time low, down to 27,715,558 ounces.
COMEX Silver Summary for 6/22/2011
*Brink's had a massive withdrawal of 1,426,355 ounces of silver from eligible vaults.
*Scotia Mocotta had a withdrawal of 4,920 ounces of silver from eligible vaults
*Delaware Depository had a deposit of 6,003 ounces of silver into eligible vaults
*Delaware Depository also had an adjustment of 5,245 ounces from registered into eligible vaults.
*JP Morgue still has had absolutely no inventory movement since they increased their silver holdings by 39% in 2 days during May's take-down.
*Registered silver supplies declined by 4,920 ounces to a new low of 27,715,558 ounces
*Eligible silver supplies declined by 1,420,027 ounces to 70,975,275 ounces.
*Total COMEX silver supplies declined to a new low of 98,690,833 ounces.
Good evening Ladies and Gentlemen:
It was quite easy to spot last night that a big raid was upon us. When you see gold and silver trashed in the access market yesterday you could bet the farm that the bankers were orchestrating another of those patented raids.
Gold closed down $32.80 to finish the comex session at $1520.10 and silver finished the day at $35.00 down $1.73.
Let us head over to the comex and assess the damage. First the gold comex.
The total gold comex open interest rose by 9555 contracts to 524,571 as many longs jumped onto the wagon. The bankers sensing their juicy prey attacked gold as well as other commodities as it seems the Obama administration is running scared with the rise in inflation. The front delivery month of June saw its OI fall from 827 to 767 for a loss of 60 contracts. We had 74 delivery notices yesterday so all of the contraction was due to the deliveries and we gained 14 contracts of gold standing. However my bet is that the total OI will fall for tomorrow's reading. (we are always one day back with respect to open interest readings)
The next big delivery month for gold will be August and this month saw its OI rise to 350,933 from 342,491 yesterday. The estimated volume today was a monster, a huge 214,322 with no switches. The bankers supplied massive non backed paper to suppress the gold price. The confirmed volume yesterday was much tamer at 149,872.
The total silver comex open interest did not follow instructions from its older cousin gold. The total OI fell by 879 contracts from 120,238 to 119,359. The front options expiry month for June saw its OI mysteriously rise by 2 contracts to 18 from yesterday's reading of 16. We had zero deliveries yesterday so we thus had a gain in total silver standing and lost nothing to cash settlements. The estimated volume today was huge at 110,372.
The confirmed volume yesterday was much smaller at 62,830. It shows you what damage can be done with a massive amount of non backed silver and gold paper. It seems to me that the low OI in silver is causing grief to our bankers as they cannot get any more blood out of this (silver) stone!!
All eyes will focus on the new front month of July in silver. Here the front month marginally contracted, from 33,656 contracts to 31,639. At this time in the delivery cycle the OI is very high as we approach first day notice.
Something scared a Brink's customer as a massive 1,426,355 oz left its customer vault. We also had a tiny 4920 oz leave a customer vault at Scotia.
Thus the total withdrawal of customer silver totalled 1,431,275 oz. We had a tiny deposit into the customer through a Delaware vault consisting of 6003 oz.
If you are keeping score, the net withdrawal of silver today by the customer totalled: 1,425,272 oz.
There were no deposits of silver into the dealer and no withdrawals by the dealer.
We did have an adjustment where 5245 oz leaves the dealer and enters the customer as a payment of a prior liability. The total registered inventory of silver drops to 27.715 million oz and the total inventory drops to a touch north of 98 million oz.
The comex folk notified us that a total of 5 contracts were sent down for servicing or 25000 oz.
The total number of notices filed so far this month total 369 for 1,845,000 oz. To obtain what is left to be serviced, I take the OI standing (18) and subtract out today's deliveries (5) which leaves me with 13 notices left to be served upon or 65000 oz.
Thus the total number of silver oz standing in this non delivery month is as follows:
1,845,000 oz (served) + 65,000 oz (to be served) = 1,910,000 oz a gain of 10,000 oz from yesterday.
This is the 7th straight day that the bankers could not completely finish the June options month. The open interest for many of those days stood at 10 contracts and now it has risen to 13 still standing.
It seems to me that the boys are having lots of trouble locating any physical silver demanded by the remaining longs. And next week is first day notice. Should be exciting to watch.
“I think the important thing is that the risk you undertake when you accomplish management of perspective economics is you build everything into the confidence you’ve created by media control and by timely acts such as the release of the oil reserves. If it doesn’t work, if it cracks, it cracks confidence across the board. Confidence is extremely fickle so there is no question that whatever is necessary to shore up the equity markets will be done, especially in this election year.
If people lose confidence, it isn’t the country that suffers, it’s the currency of the country that suffers. This whole thing is put together with mirrors, smoke and spit. You can’t afford to have any kind of financial crisis or all of the old wounds will open up and hemorrhage because of the investment that’s already been made, you’re stuck in a bad investment, the dollar. All currencies are going into oblivion and that’s why they (investors) are buying gold.
You’ve got to continue what you’ve been doing. The slightest indication that you wouldn’t continue has brought this crisis on. But you see QE is the kind of thing that puts some sort of balm on the sore of fear. Whether they call it QE or not, it’s coming back on in spades.”
“Well frankly I thought the selloff in gold might have been a knee-jerk reaction to the release of oil from the strategic reserve, possibly signifying that the government was becoming more involved in suppressing markets. That was just my initial reaction.
So I suppose you had a lot of these commodity funds that are long gold along with other commodities and they probably just panicked out. I thought at least for today that the shares acted pretty well. They sold off in the beginning and they finished with much more moderate losses than their initial trading level. To me that’s a sign of accumulation.
We’re still just backing and filling and chopping around. Gold has had a very good first half of the year and now we’re waiting to see what kind of lipstick they put on the pig for the fiscal issues. The fiscal disorder that we have in this country with $1.6 trillion in deficits, unless fiscal order is restored, the Fed’s going to have to print money. Frankly I’d be surprised if they come up with anything tangible.
Unless the government, unless the two houses of Congress and the President, the administration, can come up with a credible plan, that’s when I think all hell could break loose. We’re not too far away from knowing that...
“If for example it’s just lipstick on a pig then I think the markets get out of hand. That’s when I think the Fed, not withstanding anything Bernanke has said, is going to have to do more quantitive easing.
Clearly you have Germany, France and the ECB doing everything they can to prevent an event of default which would then trigger obligations under these credit default swaps that all of the banks have written. Some have said this could bury the big banking names in another liquidity crisis like we saw in 2008.
To me that’s a very volatile situation. People can say that Greece is only 2.5% of Europe’s GDP, but what percentage of financial assets did Lehman represent when it went under? It’s the tip of the iceberg for the banks who are also exposed in the other weaker European economies.
In my earlier comments I talked about whether we would see any resolution regarding the fiscal situation in the United States, that remains to be seen, but in the meantime we’ve got plenty of action in Europe which calls into question the viability of sovereign debt and whether or not that’s a safe asset, all of which is good for gold.”
“We’re talking about the credit default swaps. There is a crisis in the derivatives again that nobody sees, but many people know. This crisis is the fact that the person who creates the derivatives, the manufacturer, what he’s creating is insurance policies. What’s being paid for it? Higher and higher prices as all of this default talk takes place, it’s nothing more than a promise to pay.
Modern derivatives have some degree of margin behind them, but not enough that could possibly survive a default on Greece tomorrow followed by all of the weaker nations of the EU. Nobody is really putting enough attention on the fact that these manufacturers sell these things and they take in huge amounts of cash flow. But their ability, taken as a whole, to guarantee the debt of sovereign nations is simply not there.
If you think that the banking system of the western world is strong enough to guarantee the debt of the western world, you’re totally out of your mind. That’s the reason they’ll do everything possible to paper over the Euro crisis to prevent the defaults in order to prevent another crisis in banking that definitively would occur, that absolutely would occur from a default. This fact is ravingly positive for gold. You would have a complete collapse of the western banking system if Greece goes down.”