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In an earnest effort to help as many silver longs as I can I will relay information as I know it.

 

Major hedge fund traders are going to be buying hundreds of millions of dollars of March contracts during the last 3 weeks of February. The strategy is simple-force Comex to pay a hefty premium on contracts that CANNOT be delivered. Will this work? It worked like a charm in December. Those guys were all kicking themselves because they should have bought 10 times the amount of contract that they actually had in December.

 

This time around, they are getting everyone they know to get involved in this trade. They will pool their money together in order to get a large number of contracts so that Comex will not be available to deliver-thus forcing a hefty premium. These former traders are gonna pull a train on Blythe with all their hedge fund buddies and there is not a thing Blythe can do about it.

 

HOWEVER THERE IS A CAVEAT!!!

 

These traders have gotten word in the last 48 hours, that Blythe and The Morgue is about to undertake a major raid on GOLD in the hopes that silver will sell off too. Therefore, these traders are advising their colleagues to refrain from buying March silver contracts unless silver breaks $31 again. Their understanding is that Blythe cannot effectivley execute a silver selloff but Blythe and The Morgue can still execute an effective GOLD SELLOFF.

 

If and when this GOLD selloff comes, scheduled for this Friday or perhaps next week at the latest, Blythe is hoping that gold will break $1300 and go as far down as $1250. Blythe will be short selling intermitently in the silver pit but her main goal is to cover as many silver contracts as possible.

 

Once this Gold induced selloff is done watch for the mother of all rally in the silver pit. The hedge funds will be buying like crazy, but the MAIN assault will not take place until February wheren these former traders expect a rise of at least $10 (which was what happened to silver from October going into December).

 

December was just a dry run (RAID) on the Comex. The success and ease of that RAID has emboldened these traders to re-try the same scheme with a lot more money this go around (March delivery). The only defense Blythe has is to engineer a GOLD SELLOFF in the next two weeks in order to suppress silver so that she can cover her SILVER contracts.

 

So yes, I am very bullish on silver since I know that Comex cant deliver this March, but am expecting a selloff from a gold induced intervention.

 

I have been tasked by Blythe's former traders to spread the word about the fact that there is not enough physical silver in the world to cover The Morgue's short contracts. That is my role.

 

I hope this has been helpful.

 

You're going home in a body bag, do-da, do-da....

http://messages.finance.yahoo.com/Stocks_(...mp;frt=2#381868

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I'm far from a fan of JP Morgue but unfortunately this isn't going to make much difference to the price of PMs. They have an UNLIMITED line of credit from the Fed, so if the hedgies want their cash settlement they can go ahead and claim it. 20%, 30%, 60%? Just print up some more and here you are sir. Who cares, since it's the fed (and therefore by extention all dollar holders) on the hook and not the JP Morgue. This game will carry on indefinately until some big boy kicks the table over (i.e. China or Russia).

 

Still we can live in hope they karma catches up with them. ;)

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https://marketforceanalysis.com/article/lat...cle_011511.html

 

A most intriguing article on the changing relationship between open interest and price for both precious metals,

indicating a growing physical shortage.

 

Does anyone disagree with this point of view?

Couple of things:

 

it would be nice to see this data with a log-scale price axis: this is because his assertion that large changes in OI caused little price movement may be true, but surely what is important is the RELATIVE price change for a given change in Open Interest.

 

Also, what about the thesis that:

1// as price goes up, OI goes up too (till recently).

2// recently, as price goes up OI drops because longs are less willing to open positions?

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OI analysis is too ambiguous for me, exactly because as Chris pointed out it does not

differentiate between long and short contracts.

 

Changing, to log scale does not modify qualitatively the results, i.e.

the increase of OI with increasing price was modified recently to

decrease of OI with increasing price.

 

decrease of OI= decrease of longs OR decrease of shorts

 

increase of price associated with decreasing longs BEARISH

increase of price associated with decreasing shorts BULLISH

 

Yet, SOMETHING must have caused the change of the overall OI vs price relationship.

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Sales of 1-Ounce American Silver Coins Soar, U.S. Mint Says

January 19, 2011, 2:36 PM EST

 

Jan. 19 (Bloomberg) -- Sales of 1-ounce American Eagle silver coins are headed for a record this month, according to data from the U.S. Mint.

 

About 4,588,000 coins have been sold in January, according to data on the Mint website. That would be the highest monthly total since sales began in 1986.

 

http://www.businessweek.com/news/2011-01-1...-mint-says.html

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Coininvestdirect have just come back online after some IT problems

for most european countries after a delay of 3 weeks

 

vat on coins is 7 % across europe except the UK where it is 20%

They have now ADDED a 10% handling fee for all countries

except Germany and the UK

fortunately I can order for German delivery but most people

are now getting shafted by them or (in UK) their Govt

 

 

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Silver May Decline 20% as Coin Sales Signal `Crowd': Technical Analysis

 

Silver prices may retreat as much as 20 percent this year as soaring demand for physical metal signals a “crowded” trade, said Barry James, the chief executive officer of James Investment Research Inc.

 

“After a period of outperformance from silver, we would be taking a little off the table,” James said. “It’s more likely that silver will have a correction in price rather than a surge.”

 

http://www.bloomberg.com/news/2011-01-20/s...l-analysis.html

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Remember folks: Terbuim, Hafnium then Silver to 'run out' in that order. At some point soon we will need to recycle silver, and i am afraid the price point for recycling will be much MUCH higher than today's price.

2012 : end of terbium

2018 : end of hafnium

2021 : end of silver

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Silver May Decline 20% as Coin Sales Signal `Crowd': Technical Analysis

 

Silver prices may retreat as much as 20 percent this year as soaring demand for physical metal signals a “crowded” trade, said Barry James, the chief executive officer of James Investment Research Inc.

 

“After a period of outperformance from silver, we would be taking a little off the table,” James said. “It’s more likely that silver will have a correction in price rather than a surge.”

 

http://www.bloomberg.com/news/2011-01-20/s...l-analysis.html

Jolly good! 'Crash into my arms, baby'

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Jolly good! 'Crash into my arms, baby'

 

“The coin sales are an indication of the level of interest in silver,” said James, who oversees $2.4 billion in Xenia, Ohio. “It’s too popular. When the crowd discovers a good deal, it’s usually long over.”

 

So, when lots of people want to buy something so the price must be about to fall. I suppose if lots of people wanted to sell all at the same time prices would soar. Amazing!

 

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So, when lots of people want to buy something so the price must be about to fall.

Just as it was with UK house prices fro 1991 to 2007. :unsure:

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Silver May Decline 20% as Coin Sales Signal `Crowd': Technical Analysis

 

Silver prices may retreat as much as 20 percent this year as soaring demand for physical metal signals a “crowded” trade, said Barry James, the chief executive officer of James Investment Research Inc.

 

“After a period of outperformance from silver, we would be taking a little off the table,” James said. “It’s more likely that silver will have a correction in price rather than a surge.”

 

http://www.bloomberg.com/news/2011-01-20/s...l-analysis.html

 

Also

 

“The coin sales are an indication of the level of interest in silver,” said James, who oversees $2.4 billion in Xenia, Ohio. “It’s too popular. When the crowd discovers a good deal, it’s usually long over.”

 

Define crowd.......0.1%??....0.01%???

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Silver May Decline 20% as Coin Sales Signal `Crowd': Technical Analysis

 

Silver prices may retreat as much as 20 percent this year as soaring demand for physical metal signals a “crowded” trade, said Barry James, the chief executive officer of James Investment Research Inc.

 

“After a period of outperformance from silver, we would be taking a little off the table,” James said. “It’s more likely that silver will have a correction in price rather than a surge.”

 

http://www.bloomberg.com/news/2011-01-20/s...l-analysis.html

 

its already dropped nearly 13% from the peak of just over $31. I see it dropping to between $22-$25 (ie a 20-30% peak to trough)

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Well Prechter is wrong on this prediction as silver has already broken new highs. I think however Prechter will be proven correct, albeit belatedly, as I think we will see a 20-30% sell off in silver in the next few weeks as part of a healthy correction within the secular bull. However this will be driven by a sell off in the SPX and not due to silvers adverse fundamentals. Prechter doesnt know what he is talking about, but he will no doubt claim he is correct after the pull back.

 

For example, in the first 2 weeks of 2010, the SPX continued to rise in overbought territory, on the normal optimisim that the new year usually brings. There was then an 8% sell off over the next 3 weeks in to early Feb. However, at that time, silver wasnt over bought but due to its volatile nature it reacted by shedding 20% of its value. This was a healthy correction to burn off the complacent sentiment in the market and build a firm base for the spring rally.

 

I see this happening again and due to the fact that silver is very over bought currently, I can see a 30% sell off. This is nothing out of the ordinary and is part of the normal silver trend. To capitialise and in preparation, I did follow Bubb with a long dated short on the SPY, but I sold it after a chnage of heart. Trying to time the drop using time sensitve put options, in my view, is a mugs game. When the market is being artificially buoyed by QE2, the market could stay high for several weeks more than expected which could easily wipe out any post correction profits and possibly cause a trading loss.

 

I am planning to sell off the rest of my silver bullion by mid Jan to position myself for this expected correction. I sold off 50% at just over 30 bucks in mid December after silver reached very overbought territory at 1.5 x 200 dma. I will then be buying back in agressively once sentiment has become a little less complacent in the markets following the expected 10% SPX selll off and associated 20-30% silver correction. I expect silver to get to around $31.50 and pull back to between $22 to $25.

 

;)

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Silver climbed to $31.19 on Monday and has now retreated below its 22 day moving average for the first time since late August. I now think it is highly probable that we will see a sell off between 20% and could be as much as 30% in line with an SPX sell off. This normally takes around 3 weeks, although the SPX has held firm this week. I therefore expect a low by the end of Jan / 1st week in Feb of around $22-$25. I will then be reversing up the truck to load up heavily for what may be a large spring rally.

 

Although I did miss the absolute peak as the UK market was closed on the 4th Jan, I did sell 50% of my silver in mid December (despite alot of people on here indicatig I was bonkers) so I am now cash rich for when silver bottoms out in 2-3 weeks time.

 

It is like taking a silver holiday and then getting free silver as a present for your return back to market.

 

:P

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I sold half my silver bullion and miners today at $30.05 as I think we have seen an interim top. This was 1.49 x 200dma realising 100% gain since Aug 09.

 

In 2008 silver peaked at 1.47 x 200dma and gold at 1.3 x 200dma.

 

In 2006 silver peaked at 1.7 x 200 dma with gold at 1.38.

 

All other seasonal high corrections have been with gold peaking, but at the moment gold is nowhere near over bought at 1.16 x 200dma. Therefore it is very possible that this pullback (if that is what we get) will only last a couple of weeks and we will then get another peak into january.

 

I am therefore now expecting a 10% trim and will buy back in modestly at $27 (in case the pull back turns in to a full on correction).

 

If silver continues to rocket with the 200dma moving up I will continue to sell my position with a further 25% at 1.6 and the whole lot at 1.7 x 200dma.

 

If it goes to the moon then I will have still done very nicely and won't complain.

 

I will then buy in heavily next summer when it is likely to drop back down around 1.0 x 200dma lows.

 

My only concern with my approach is that it seems too easy, I can't believe everyone is not doing this. From experience, when I feel like this normally about things (ie like a smug g*t) in life that is when I usually fall flat on my face on something that is usually right under my nose. Is this approach too simplistic? what might go wrong?? <_<

 

So far, this trade (fingers crossed) has gone well, so it is good to look back at the thinking and the sentiment at the time. My approach to trading relative to the 200dma is standing up very well.

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So far, this trade (fingers crossed) has gone well, so it is good to look back at the thinking and the sentiment at the time. My approach to trading relative to the 200dma is standing up very well.

 

Because all silver peaks in the bull to date have co-incided with gold peaking and this is why I think, following the early Feb bottom, there is a good chance we will see a strong rally in gold and silver, so the interim top may not yet be in. This is especially true as the seasonals into spring tend to be good and there is a lot of evidence of silver shortages in the comex, which hedge funds could use to force the price of silver up. I can see $40 being taken out.

 

If this happens and we go above 1.5 x 200dma again, this will be a very definate sell signal to position for the summer duldrums and the autum rally. Therefore if all goes to plan I will then be buying back in late July / early August when it sinks to 1.0 x 200dma.

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Congrats on your call so far Learner.

 

This thing can turn on a sixpence though! :rolleyes:

 

Despite being heavily in physical which I won't trade, I would not be dissapointed to see the early 20's again.

 

Sold out my miners too soon and want to get back in! The cheaper the better.

 

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I don't really understand the relevance of this, but it seems pretty dramatic! Anyone here got any advice on it:

 

http://ftalphaville.ft.com/blog/2011/01/21...pdatedcontent=1

It is possibly expectation of further falls so someone has dumped some. It looks almost like a short attack to me.

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