Yeah - I'm afraid the 'rally' is nothing more than a huge Bull Trap. I know you don't want to hear that. I know you wont believe me. But I'm telling you because there's a few out there that might just heed the warning and go out on a limb to protect themselves from what's going to happen.... and if you are like me, then you are going to take all your proceeds from trading this paper and turn it into physical, when it's at its all time cheapest, on Friday - at a price lower than what you think is even possible right now.
Here are some reasons why this whole rally is going to tank as soon as tomorrow, and why you are once again on the wrong side of the trade...
1.) You believe the price cant go lower than the cost of production. You are wrong. It cant go lower than the cost of production for very long, but it can go spike *much* lower in the short term.
2.) You believe the whole rally was a result of the Bears being wrong and having to cover. You are wrong. They painted the charts to only appear like that.
3.) You think that all time open interest means there are new buyers and interest in the market; this makes you feel safe. You are wrong. There is only one new buyer in the market and this buyer only has one mission in life: trip the sell triggers.
4.) You think they only manipulate the price DOWN. You are wrong. In order to manipulate it down, they HAVE to manipulate it up. In other words, all they do, is wait for a head and shoulders pattern to appear, and JUST BEFORE the price falls off, they buy an enormous spike and start tripping sales higher up. Do NOT confuse this buyer (who buys as the price falls off the right shoulder) and a covered short that would be placed at the point of max pain (at the top of the head).
At the end - tomorrow maybe 30 mins into it(?) - that same buyer will sell everything they bought - at the top - and drive the price back down. As soon as it starts to plunge the move down, trips additional sell orders, and the price smashes down in a waterfall event.
What will make the price go down with more violence than on the way up, is because there wont be anyone there slowing down the decent. On the way the way up, the price was greatly absorbed by the HFT platforms that were selling the rally down, compressing it. They did this so the price wouldnt go too high, and they could use all that energy to blow out the bottom that you think cannot be breached. Again, you are wrong.
5.) You think you are in the green zone. You are not. You are in the YELLOW ZONE and its going to to pink right now, not green.
5.) You think <insert anything> determines the price of silver. It doesn't. In fact, the ONLY reason we are where we are, is because Bear Stearns went broke shorting silver in 2008, and JP Morgan bought them for pennies on the dollar. (Rread THIS link.) Some might argue they even CAUSED the price to rise in order to RUIN Bear Stearns. In any case, JP Morgan needs to unwind it's short position, and until they do it tomorrow, there is NO hope for higher prices.
6.) You think the price is just going to meander its way up to the moon. It's not. They are going to smash the shit out these metals so no one wants anything to do with them by friday, and tell everyone there is no more metal, because the market was broken. That's your 'reset' right there. New Shanghai markets (among others) for physical are almost in place, where if you want to sell silver, you will need to deliver it - no more short selling. They learned.
7.) You think Friday will be a good day, and you are going to avoid a expiration day smashdown. You aren't. Stock Market is teetering on breaking new highs at all costs... and by 'all costs', I mean they are going to make the metals look like anything but a safehaven as the SHTF.
8.) You are relatively smart person but always wrong when it comes to silver. You've been suckered over and over again. Guess what? It is going to happen again. Tomorrow morning 10am EST would be a good guess. In fact, my guess is they will come in low again in the morning, climbing. They will make a half hearted attempt at making a new high, it will fail.... and then it will cascade down from there, in a classic Bull Trap to Waterfall event. A day that will be remembered by stackers in infamy.
9.) All this COST AVERAGING didn't work out as well as you hoped because it never went up. That's because it's crooked and they keep feeding you information, which you keep accepting as true. And while you WILL eventually sell that stack for more money than you paid, most of you could buy 3 times as much if you just waited until Friday. Cost averaging is for when prices go up and down - it does NOT work when they just go down.
...ok, so let's just say I'm right. What can you do about it? Get ready to buy on Friday, if nothing else. And if you want to cover your losses, buy some 'Put' options that will go up as the price goes down...
...but do not buy until AFTER it drops (unless you have NONE, in which case, buy now and later). But this is almost a certain event, in my mind. And here is why:
...in other words, yes, the shorts covering sparked the rally, but there is no interest, no other volume to speak of, if you take out all the dirty money and it's tanking just enough to send the signals to the tech funds that it's time to exit their trade and sell.
Anyway, I'm sure there are some that will disagree, but I think we'll know whaty happened as soon as tomorrow morning and no later than Friday. Get ready.