Monday
Jun272011
Silver at Multi-Month Closing Low
Monday, June 27, 2011 at 05:04PM While equities did well today, commodities didn't. One commodity that had another rough day was silver. Below is a six-month chart of the heavily traded Silver Trust (SLV). After declining more than 2% today and 8% over the last four days, SLV is now below its closing low from mid-May. With this key support level broken, is silver about to take another leg down?
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Reader Comments (38)
I hope so. It'll definitely make the movement easier. The Silver Viral Project and the SLA could empty the shelves at $20 silver!
All this proves if silver does take a dive is that people are stupid. I hope it does fall because it will simply make it easier for me to collect more ounces.
People have not figured out that you cannot print money without consequences. Unions keep refusing to provide concessions. How can you expect silver to do anything but richochet? Like I say, if it all falls, yay me. I have a goal of a certain number of ounces of metal, not dollars, because the day is coming when it is ounces, not paper or digital digits, that count.
Its up to JP Morgan. A short position as large as JPM holds in silver futures pretty much gives them control of the market. The problem for them is that the fall from $48 to $33 cleaned out most of the speculative long contract holders and there isn't really much left to wring out of this thing. If they can get gold futures pulling back or push the miners into another tailspin, then silver will follow and it will move lower as well.
A month ago you guys were telling us to buy as much silver as we could. What's up?
It's highly unlikely that silver will take a large dive, considering the supply/demand equation. However, either investment goonies and/or malipulation of the market could cause the current price to be reduced. The value, however, is still dramatically higher than the price portends. Remember that, when you're at silver in the hundreds of dollars an ounce in the not to distant future.
Wow what an informative article. All 3 sentences and the chart. Keep up the good work people.
Personally, I don't feel SLV has broken support yet, because it did not violate the intraday low in mid-May. Good monthly support is at about 31.75. If that area is broken and I would watch the higher one carefully, there could be significantly more damage. It is my view that commodities follow these technical guideposts fairly strictly because the true value is hard to determine. When the value of something depends more on the fear level about the economy and world fiat currencies, it moves up and down with that level of fear.
I sure hope so. I've been waiting quite a while for another big buying opportunity so I can add to my stash.
Silver and gold with both go down in price until the Fed starts up the printing press again. In my opinion July and beginning of Aug are good buying opportunities. As soon as the Fed announces QE 3, probably the end of Aug or beginning of Sept., the metals will sky rocket again.
The bullion banksters are just getting more and more desperate in their suppression schemes as they cannot locate enough physical silver for delivery. COMEX and LBMA vaults are virtually empty, and the supposed holdings of SLV is the biggest fraud eve perpetrated.
...SLV is the JPM Goldman Sachs precious metals manipulation scam sanctioned by the FED - these people should be lined up and shot for treason, their paper is worthless garbage, SLV has no silver, only paper futures contracts backed by paper fiat dollars - i will soon be worth the paper on which it is printed
At $33 today SLV is below the $35/oz level of support. The next support level is $29.
Tell the guys on Ebay that Silver is headed for a downturn. Can't get a damn Standing Liberty Quarter for less than several hundred dollars. A Chinese Panda is gonna run you $60 to over $249 a shot. Forget it your wrong. Gold is king of course but both will continue to hold their own. Please no more negative propaganda to manipulate whatever it is your trying to do. What people are paying is very different from what your saying. I hope like heck it goes down so I can buy a truckload and have real money!
Elliott Wave analysis certainly suggest the next move is down. The A - B - C(triangle) corrective waves having been completed.
Correction - Elliott Wave analysis suggests that the next move is down, the A - B (triangle) waves of an A-B-C correction having been completed.
The date 1/25 gives the buy signal for silver. When it is trading at about $26 per ounce, and gold is between
1200 and 1300 per ounce, that would be a good time tyo buy CEF. With QE2 ending this week, the likelihood
of these prices is not remote.
I agree with Larry Jansen. Here's an interesting analysis on gold and silver which goes into not only supply and demand, but the costs of mining and depletion of underground supply, as well as reckless monetary policy of fiat currencies. The conclusion points to a significantly higher price in both metals.
http://www.chrismartenson.com/blog/screaming-fundamentals-owning-gold-and-silver/59850?
This is a technical analysis. It may be right for short term. Good luck on the timing. I prefer a macro, long term view which will bring a tremendous price for silver in the not-too-distant future.
Yes, I agree with several comments above about the possibility of the price of silver being manipulated. In the end, regardless of the possible manipulations, you have to ask yourself: Which do I trust more, fiat paper US Dollars manipulated by the Federal Reserve and Congress being willing to make the tough decisions to balance the budget... or ounces of gold & silver to hold up their buying power in the long run, regardless of their price swings in the short term due to manipulations & Market sentiment swings? I'm going with ounces of gold & silver! So as gold & silver prices drop, I'm not selling what I have: I'm buying more of both on the dips. I have absolutely zero confidence in the Federal Reserve & our corrupt politicians who are only interested in re-election & not solving our nation's financial problems. In fact, I agree with some financial advisors who say basically that our financial situation is so bad, it's probably already too late to avoid a financial collapse. The only question is how that collapse will work itself out, since the beginning of that collapse has already begun.
The silver paper market is rigged therefore charts have been painted. to reflect only what the cabal and their agency backers direct.
The physical market will be their undoing and they know this. Anyone who sells any physical silver regardless how low they set the paper price will have been doing themselves a great diservice.
Silver belongs at $6000 per oz plus. This is why they are so desperate. Those in government. who have decieved the masses do to greed and power will fall and true justice will prevail once again.
Wake up citizens! Your not in Kansas any longer!!!!
"A month ago you guys were telling us to buy as much silver as we could. What's up?"
What's up is that making predictions is hard, especially when it involves the future.
I'm gearing up to buy as much as I can afford. I purchase every month (cost averaging) and am very content with my progress. All the fundamentals are in place for silver to retain its value as the beleaguered dollar drops into the sewer. Be warned, people. Be warned. Use your common sense. Prepare. The doors are closing.
Apparently now is not the time to enter into new metal purchases. Silver may still have further to fall given the economic crisis in Greece, Italy, Spain and Portugal. The IMF can restructure Greece's debt but a default whether technical or not is still a default. China may lend support to the euro because 70% of its exports are to europe but China is in inflation mode themselves and are going to have to deal with its currency devaluation sooner then later. The U.S. dollar will have a rally against the euro in the near term which will not fair well for the metals. I am but a layman but i will look for a lower spot silver during the summer months and a rally near year end as we go into the holiday season. I think ownership of both silver and gold in whatever percentage is a must in this economic environment. The dollar will collapse as will many other fiat currencies as the global currency market once again will turn to gold for monetary stability.
Any further decline in the price of silver will only make a better buying opportunity later. With the continued economic collapse of the USA & US Dollar, it is inevitable that some commodities (basic food) will continue to increase, housing prices will continue to fall & "real money" (gold & silver) will continue to increase in US Dollar terms as the fiat US Dollar continues in its death spiral downwards. I do not believe we have been close yet to the tops in the price of gold/silver as world fiat currencies collapse & people, as well as central banks, restock their gold/silver supplies in order to move away from fiat currencies. In short, I do not think we are in a gold/silver bubble yet that will lead to a massive & sustained price collapse. This is just a "shake out" decline to get rid of late speculators who may have bought gold/silver on margin lately.
I am also anticipating another move down in precious metals over this summer.
Historically July and August have been week months for metals.
If that happens, I will consider that a buying opportunity as well.
No on can accurately predict what will actually occur in the short term but long term fundamentals seem to be firmly in place supporting much higher prices.
Scaling in now even at current prices, and continuing to do so on any pullbacks along the way until the proverbial cork pops seems to me to be a wise plan.
Anyone planning to accumulate silver and gold should be able to do so at wholesale or dealer cost pricing.
Find out how to Produce, Provide and Protect Wealth at: www.BestPriceOnSilverGold.com
I agree with Tim Singleton's post, that if silver goes down great for me. I'm in silver for the long hall. If it drops a large amount I will surely continue to buy silver. I will always have silver & gold, especially when paper money has no value.
So, Buy silver if you can it will always be a good thing to have on hand.
I hold an ounce in one hand with 30 bucks in the other hand. Then I look into my safe and giggle. Let's not forget the consequences of the current manipulation of paper currency, that paper being owned by someone else. The price of silver will dip to convince foolish investors to sell out. Flooding the market with tangible asset. Certificate holders can then cash them in for oz's. Classic move of taking tangible from the masses, smoke and mirrors. Anyone can see the simplicity of this move, driven by nothing else but greed. And the weakening of paper currency. Good luck.
A large number of silver shorts will start closing over the next month because they know the USA is going to have to loot the federal retirement, social security, and medicaid funds after Aug 2. Even JPM will have to cover it shorts this month or face insolvency. They kniw metals will go through roof by September. I do hope I can wait till late Aug to buy silver again. This will require the continued looting of those funds after Aug 2
It seems to me that manipulation of the market may be more difficult than it has been in the past, before Feb. when COMEX changed the rules pertaining to short selling, which surely had to affect JP Morgan's bloated position.
If the price of silver tanks, I'd think it'd be something wild, like that several-thousand-point drop in the DJ some months ago. I wonder if 32 isn't a floor for silver right now; some of that depends on the economy and industrial demand. I like to think of it as $40 is the new $20 in silver, no matter how you graph it. I'm buying junk at this price, for what it's worth.
Regardless of manipulations by the banking cartels, "Main Street" individuals and small businesses are already using silver, especially pre-1965 US monetized 90%-silver content circulated coins, for swapping and barter-purchasing purposes. Case in point: Look at e-Bay and you'll be shocked to see that the "manipulated" spot price is being pretty much ignored by both buyers and sellers alike. There are no viable "conveyance of value" vehicles available today besides silver coins for the men and women who live and work on "Main Street" who is just trying to survive with reduced income streams while facing increasing prices for almost every commodity needed for human survival.
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Appreciate the reduction in the prices for silver, especially coins. It means that it already-monetized silver especially simply becomes more affordable to purchase as a hedge against on-going inflation and expected bouts of hyper-inflation in the weeks, months and years to come.
The utilities companies, mortgage lenders, tax authorities, etc. are forcing Americans to purchase dollars in order to pay monthly obligations right now, but the smaller local business transactions between friends, neighbors and relatives are becoming ever-more-grounded on the use of US monetized precious metals (not monetized debt instruments) to exchange or make change for barter opportunities for clothing, food, fuels, etc.
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I'm trusting in the ingenuity and new-learning skills of the still-independently-thinking American consumer and no longer at all in the federal government, the banking cartels or Wall Street.
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Respectfully submitted,
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Thomas Avery Blair, EA
Amazing how for months Stansberry research kept pushing people to buy in to the silver market. Such barf! No one can predict the future. The fact that the Fed has ended QE-2 for now portends a rise in the value of the dollar over the near term and a drop in commodity prices. If the Fed continues onward toward more monetizing of our debt, including another round known as QE-3, then expect the commodity prices to rise again. Like lawyers who always get paid no matter the outcome, these slimy investment brokers always make money either way, on the way up or on the way down. Broker, by definition, means go-between. Someone is always getting paid - pathetic.
I do not agree with the author. The stock has to CLOSE BELOW a' 33.30 or so before the head and shoulders config. could be triggered. In the last 2 months this area was visited 6 times, including last Friday. Held each time so far. Disclosure - not in silver at this time,last week jumped the gun and tried to go short using ZSL but got out = too high a risk.
Be aware of how it too often works in the "financial advice" racket. Be sure to give out contradictory advice so you cover all eventualities. You will generally be right at least 50% of the time, just by chance. So, when you're right you trumpet that in your marketing to other future prospective clients who will hopefully sign up and pay you for your advice. The 50% who made a move based on your advice and lost money will hesitate to advertise their losses to friends and family. The 50% "winners" will crow about it and tell their friends to come sign up with you. You can't lose. It's human nature to hide your losses and brag about your big gains. They know this.
I subscribe to one service that will have 100% diametrically opposed advice in the same week. When readers question this, they get a scolding of "we allow diverse opinion here at my company! Do you expect me to not allow these smart men their opinions?". Then when they pick losers they fail to bring them up again. The winners they trumpet on every letter at the bottom of the page. They will brag about warning of the huge drop in silver, all the while advising you to hold a silver mining concern that dropped 30%. If silver went up, they'd point out that they told you to hold that stock. If it drops they point out how they issued a "warning". Win-win for them.
The best thing to do is to slowly learn for yourself what makes things happen, or not short-term trade at all.
"Unions keep refusing to provide concessions. "
WTF?? How about corporations that refuse to stop offshoring US jobs, importing cheap/illegal labor, privatizing the profits while socializing any losses, going out of their way to avoid paying taxes (Hello, GE), and sending this country into a nascent fascist state.
That horse$hit union scapegoating dog won't hunt. At least for anyone who's been paying attention and not drinking the country club koolaid that unions have anything to with why this country has gone to hell. Yeah, hold onto your Topsiders, Buffy, this $hitstorm is just getting warmed up. The best is yet to come.
My most immediate concern is the ability of the federal government on the debt limit. We assume it will be ok but House republicans have signed a document stating that tax increases of any type if off the table. I am fortunate to be in the group that would have to pay more. I would be ok with an increase. We still get a break up to 250k.
Austerity measures must be taken to maintain bond valuation. Thumbnail economics is that the economic value of cuts after 250k mostly gets saved, giving about .8 cents on the dollar. When finances are given to states to maintain teachers, policemen and talented civil servants, this money gives us 1.3 cents to the dollar. They have immediate needs; things that need to be made, increasing manufacturing and jobs.
If u make a million, you can afford an extra 40k. If u think you have it bad or that poverty will repair itself via social Darwinism, go to Rio. Without investment, which is a small part of our overall budget, we will pay for more prison guards. The effects of all removal of social support for the poor, the underlying "solution" which appeals to the masses, is not the solution. A bloated an ineffective governments not the solution either. Reasonable cuts must be accompanied by reasonable tax increases. Reagan went up on taxes 6 times, senior Bush once. Roughly 1/3 of the maligned stimulus went to give us tax breaks.
The White House has compromised enough and will make a stand. The House has signed a document. It's going to be a fight, with immediate consequences on the economy. Short term I believe, we should be getting into cash within the next 1-2 weeks. It's gonna be a fight, the VIX is going to the upside.
Hope I am wrong.
I am glad to see so many not falling for the silver warning crap out there. There is
no way on God's green earth that it will not continue to rise much farther than they
anticipate in the relatively near future. Some are saying gold will rise and silver
will fall substancially. NO WAY !! The silver/gold ratio has been contracting steadily
now for months and still has a long way to go. Please, eveyone panic and sell
to depress the price so that I can buy more on the cheaper..
Where was the promised article?
Times like this I like the gold:silver ratio trade. Back in the April blowoff I swapped most of my silver for gold. I will eventually swap back for silver with a gain in ounces. If silver plunges from here, I will gain more ounces when I trade my gold back for silver, Whatever happens, my savings are still stored in coins, not in paper or promises.