Nice Reversal

[beauanderos]

Woohoo! Now, where were we on that chart? Can we please enter the hope phase?

[silverflake]

Did we just capitulate? Did we reach bottom? Good volume on SLV....

[Hawkeye]

I need it to stay low until until Thursday. This is not good. I'm like a silver addict - "c'mon man, just one more hit of cheap silver before it goes back up." I'm starting to get jittery. Of course, tomorrow it might be down to $20. Who knows. I think I'm going to just buy a little when I can and stop worrying about the fluctuations.

[Sheikh_yer_Bu'Tay]

I need it to stay low until until Thursday. This is not good. I'm like a silver addict - "c'mon man, just one more hit of cheap silver before it goes back up." I'm starting to get jittery. Of course, tomorrow it might be down to $20. Who knows. I think I'm going to just buy a little when I can and stop worrying about the fluctuations.

+1

[Lemon Thrower]

http://www.zerohedge.com/news/2013-05-2 ... lash-crash

[Jonflyfish]

I could be 100% wrong of course so don't be influenced by what I say and always DYOD(Do Your Own Diligence). Having said that, it looks as though there may be plenty of selling into any rally from the crowd who feel- "Silver can't go down, OMG! I bought big when it was 3x-4x because the silver whatever dot com site had reason after reason why silver has to obviously go up with clear certainty and to buy and BUY NOW! At this point, I just want to get out with whatever I have remaining." I know folks here would never think that way but there are many who do.

Cheers!

[Rodebaugh]

Ray your in denial. 18 next stop.

[InfleXion]

From a price standpoint, only buying and selling of electronic contracts matters.

The people who might be liquidating their stash for a loss are just lining dealer pockets. Little fish don't influence the price. It's a speculator's market.

I was very happy to get in at 21 now in hindsight. If we see 20 I'll pull the trigger again all the way down.

[Market Harmony]

How much longer until we see it go down just as sharply? Or make another move like this higher?

These volatile moves like this don't give me too much confidence in the market's ability to portray actual value... unless a move like this is event driven, I don't see how 1000 ounces could be worth $22,000 one minute, and $23,000 just ten minutes later. Without getting into the conspiracy theories and facts of price manipulation, there is something not right with a market structure that cannot seem to find a balance of bid/ask prices in a paper atmosphere. If it were truly to exist in order for real users to hedge their positions/output, then the bid/ask would represent something different than speculation.

I cannot wrap my brain around this... this concept of violent price swings in a sophisticated market. It is a good thing that I do not have to predict price movements. I'll leave that up to others and have them shoulder the weight of the world

[Jonflyfish]

How much longer until we see it go down just as sharply? Or make another move like this higher?

These volatile moves like this don't give me too much confidence in the market's ability to portray actual value... unless a move like this is event driven, I don't see how 1000 ounces could be worth $22,000 one minute, and $23,000 just ten minutes later. Without getting into the conspiracy theories and facts of price manipulation, there is something not right with a market structure that cannot seem to find a balance of bid/ask prices in a paper atmosphere. If it were truly to exist in order for real users to hedge their positions/output, then the bid/ask would represent something different than speculation.

I cannot wrap my brain around this... this concept of violent price swings in a sophisticated market. It is a good thing that I do not have to predict price movements. I'll leave that up to others and have them shoulder the weight of the world

Massive real liquidations. Not by the 5x1,000 oz, but literally by the ton. There is no free arbitrage in that magnitude. The "paper atmosphere" is reflecting the "physical atmosphere". What happens in one money center is inter-connected to the others. Sophistication does not equate to low market volatility, but can for portfolios

Cheers!

[natsb88]

These volatile moves like this don't give me too much confidence in the market's ability to portray actual value... unless a move like this is event driven, I don't see how 1000 ounces could be worth $22,000 one minute, and $23,000 just ten minutes later. Without getting into the conspiracy theories and facts of price manipulation, there is something not right with a market structure that cannot seem to find a balance of bid/ask prices in a paper atmosphere. If it were truly to exist in order for real users to hedge their positions/output, then the bid/ask would represent something different than speculation.

Nonsense. The paper markets are the true mechanisms of price discovery. The 7% drop over the course of a few minutes and then the 10% swing back up a few minutes later simply reflect the true supply and demand for physical silver. Everybody was late to work this morning so nobody was ordering silver when the market opened...then a few minutes later all the industrial users called in their orders for the week and the price went back up to reflect the new demand. There is no room for manipulation in a large liquid pool like silver futures. It's a zero sum game. Besides, silver is an industrial material; the percentage of silver contracts bought and sold by speculators is small enough that they are inconsequential to the market price.

And leaving $23-based price tags on the silver in your store's display case when spot has fallen to $22? That's extortion, sir. It's your responsibility to hedge your inventory. You are obligated to sell at $22-based prices if somebody walks into your store during a brief dip and demands to buy at that price. The physical silver you own and the customer wants to buy...the value of that is set by paper market, not by you two. To think otherwise is unscrupulous.

[Jonflyfish]

These volatile moves like this don't give me too much confidence in the market's ability to portray actual value... unless a move like this is event driven, I don't see how 1000 ounces could be worth $22,000 one minute, and $23,000 just ten minutes later. Without getting into the conspiracy theories and facts of price manipulation, there is something not right with a market structure that cannot seem to find a balance of bid/ask prices in a paper atmosphere. If it were truly to exist in order for real users to hedge their positions/output, then the bid/ask would represent something different than speculation.

Nonsense. The paper markets are the true mechanisms of price discovery. The 7% drop over the course of a few minutes and then the 10% swing back up a few minutes later simply reflect the true supply and demand for physical silver. Everybody was late to work this morning so nobody was ordering silver when the market opened...then a few minutes later all the industrial users called in their orders for the week and the price went back up to reflect the new demand. There is no room for manipulation in a large liquid pool like silver futures. It's a zero sum game. Besides, silver is an industrial material; the percentage of silver contracts bought and sold by speculators is small enough that they are inconsequential to the market price.

And leaving $23-based price tags on the silver in your store's display case when spot has fallen to $22? That's extortion, sir. It's your responsibility to hedge your inventory. You are obligated to sell at $22-based prices if somebody walks into your store during a brief dip and demands to buy at that price. The physical silver you own and the customer wants to buy...the value of that is set by paper market, not by you two. To think otherwise is unscrupulous.

Excellent! You are right! As someone with a conflict of interest, you have to be. After all, nowhere else in the world trades metals but in the Copper Cave. The precipitous drop in silver prices from the peak near $50 was only from the disconnected fictitious "paper traders"....until it wasn't...all the way down No way/no how those silly hedges could possibly offset this- preposterous!
Cheers!

[johnbrickner]

Go figure. All this back and forth movement whilst I was learning/figuring our how to hedge with 3 way collar options.

[blackrabbit]

Hey Doc, while I agree that we could see 18 again, what are your reasons for naming this price as a low?

[shinnosuke]

I could be 100% wrong of course so don't be influenced by what I say and always DYOD(Do Your Own Diligence). Having said that, it looks as though there may be plenty of selling into any rally from the crowd who feel- "Silver can't go down, OMG! I bought big when it was 3x-4x because the silver whatever dot com site had reason after reason why silver has to obviously go up with clear certainty and to buy and BUY NOW! At this point, I just want to get out with whatever I have remaining." I know folks here would never think that way but there are many who do.

Cheers!

I dunno. Perhaps even some folks who bought in the high 20x range and can't stand the volatility could sell into those same rallies, fearful of another drop. Not me.

Signed,
The Black Hole of PMs

[beauanderos]

Not gonna hurt my feelings if it continues to drop. I'm in stacking mode

[ZenOps]

Japan capitulating silver to pay for $16 per GJ natural gas because they had to cave into public pressure to stop using nuclear for electricity generation.

Thats about 2/3rds per ounce silver per GJ, which is a lot considering they have to burn millions per day just to stay alive.

As to why it went up later? No idea.

[InfleXion]

How much longer until we see it go down just as sharply? Or make another move like this higher?

These volatile moves like this don't give me too much confidence in the market's ability to portray actual value... unless a move like this is event driven, I don't see how 1000 ounces could be worth $22,000 one minute, and $23,000 just ten minutes later. Without getting into the conspiracy theories and facts of price manipulation, there is something not right with a market structure that cannot seem to find a balance of bid/ask prices in a paper atmosphere. If it were truly to exist in order for real users to hedge their positions/output, then the bid/ask would represent something different than speculation.

I cannot wrap my brain around this... this concept of violent price swings in a sophisticated market. It is a good thing that I do not have to predict price movements. I'll leave that up to others and have them shoulder the weight of the world

Agreed, but the volatility is telling us something else too. The market is conflicted. The more volatile it gets the more easily it will break to new highs. If it breaks to new lows the physical inventory will get that much tighter anyway. With the HKMEx being shutdown completely yesterday and the CME halting trading 4 times also yesterday it is apparent that the electronic markets have their hands full and I would bet they are experiencing major delivery issues at $20 silver. The HKMEx had to cash out all its customers, no delivery. Essentially they pulled an MF Global, but it's not hitting the wire as that big of a deal since there wasn't any (known) scandal involved.

[scyther]

JFF, I have to say that whatever I thought of your predictions (or whatever you want to call them), you always seemed calm and collected in the past. What happened? Now you're just being an immature troll. Get over it.

[theo]

These volatile moves like this don't give me too much confidence in the market's ability to portray actual value... unless a move like this is event driven, I don't see how 1000 ounces could be worth $22,000 one minute, and $23,000 just ten minutes later. Without getting into the conspiracy theories and facts of price manipulation, there is something not right with a market structure that cannot seem to find a balance of bid/ask prices in a paper atmosphere. If it were truly to exist in order for real users to hedge their positions/output, then the bid/ask would represent something different than speculation.

Nonsense. The paper markets are the true mechanisms of price discovery. The 7% drop over the course of a few minutes and then the 10% swing back up a few minutes later simply reflect the true supply and demand for physical silver. Everybody was late to work this morning so nobody was ordering silver when the market opened...then a few minutes later all the industrial users called in their orders for the week and the price went back up to reflect the new demand. There is no room for manipulation in a large liquid pool like silver futures. It's a zero sum game. Besides, silver is an industrial material; the percentage of silver contracts bought and sold by speculators is small enough that they are inconsequential to the market price.

And leaving $23-based price tags on the silver in your store's display case when spot has fallen to $22? That's extortion, sir. It's your responsibility to hedge your inventory. You are obligated to sell at $22-based prices if somebody walks into your store during a brief dip and demands to buy at that price. The physical silver you own and the customer wants to buy...the value of that is set by paper market, not by you two. To think otherwise is unscrupulous.

Excellent! You are right! As someone with a conflict of interest, you have to be. After all, nowhere else in the world trades metals but in the Copper Cave. The precipitous drop in silver prices from the peak near $50 was only from the disconnected fictitious "paper traders"....until it wasn't...all the way down No way/no how those silly hedges could possibly offset this- preposterous!
Cheers!

I've often thought that silver's price decline over the past two years has been aided, in part, by the destruction of the speculative longs. Hundreds, perhaps even thousands, of fortunes were lost during the handful of waterfall crashes we've seen in silver since Spring 2011 (especially the Mayday Massacre). This amounts to literal demand destruction as many those were willing to take speculative positions in silver no longer have the capital to do so. Those investors who still have some of their wealth are cowed by not-so-subtle warning: "speculate with the shiny stuff and we'll make you pay." The rest of the investing public are sagely told by their brokers and the MSM that silver is a risky, volatile investment that should be avoided.

[Jonflyfish]

JFF, I have to say that whatever I thought of your predictions (or whatever you want to call them), you always seemed calm and collected in the past. What happened? Now you're just being an immature troll. Get over it.

You already spoke about what you thought about the prior market musing with enthusiastic negativity. Yes I am calm. However, I'll tell you what's changed- it isn't your ever present trolling and badgering, however. That is growing quite old and tired. What has changed is that the market has sold of precipitously and some (READ: S-O-M-E) uncouth dealers have gouged people who trusted them and their lies about why the price gouging premiums were to be taken as honest and fair prices when in fact there were other dealers who chose not to legally and unethically steal from customers. I posted about such unscrupulous activity when it was happening. There are many reasons why one would be sneaky and knowingly convince someone else to pay for what should have been their losses.
Some folks who have a conflict of interest here decided to take it at bat. That tells me that perhaps there are predator thieves in lambs clothing here. They have tried to twist and contort my words and message in an ill intended attempt to cover their tracks by trying to discredit and disparage the truth. They have lied. I won't mention names. Their posts are on the forum.

I'm sure some dealers here did not gouge anyone while others were, because they couldn't stoop to such levels in the gutter of morals and ethics of the unscrupulous predators. To those I applaud ( yet again) They prove through actions, not words, who can be trusted.

As for your empty rhetoric and substance-less comments...

Perhaps you could offer something of value originating from your own thoughts instead of lurking and leaching others. Mature your efforts and learn to speak for yourself and not disparagingly and begrudgingly about others. Let your own efforts speaking about the market do the talking instead of your cheap shots directed towards others.

Cheers!

[Jonflyfish]

I've often thought that silver's price decline over the past two years has been aided, in part, by the destruction of the speculative longs. Hundreds, perhaps even thousands, of fortunes were lost during the handful of waterfall crashes we've seen in silver since Spring 2011 (especially the Mayday Massacre). This amounts to literal demand destruction as many those were willing to take speculative positions in silver no longer have the capital to do so. Those investors who still have some of their wealth are cowed by not-so-subtle warning: "speculate with the shiny stuff and we'll make you pay." The rest of the investing public are sagely told by their brokers and the MSM that silver is a risky, volatile investment that should be avoided.

It's natural human tendency to find stories and ideas that support their position. However, markets are more dynamic and complex than simply destroying all "speculators" (whoever that is) and rewarding the non-speculator. Everyone is a speculator. Human psychology drives decisions whether they were translated to mechanical systems or purely subjective. The reason why anyone buys or sells an asset is speculative in nature. If folks here buy silver, they are speculating if they hope, think, pray for silver to go up in value. I know some here don't feel that way too. People who hedge speculate that portfolio risk may increase. Some traders buy long physical in one market and sell financial in another against it. Some buy financial instruments in one and sell physical in another.
Some think that if prices go down it was manipulation because that's not how they were positioned. And if it goes up they cheer, believing that they somehow just showed the likes of JP Morgan who's boss. Market are what they are. With more participants the prices are more liquid. When fragmented prices become localized and sometimes to the extent of extortion.

Aside from that, I've seen the tone change here over the months as silver has gone down. At first people claimed that they didn't care because they have "sound money" in metal (I'm not arguing for or against such soundness) Now I see folks very concerned after a precipitous drop. My comments are trolled and butchered. Some folks have even written near suicidal soliloquies here only to later say that they were just cantankerously joking around with other folks minds, along with a quick ask of forgiveness. I've been on the receiving end of some of the BS stories spoken in such commanding and dogmatic tone. When I first came to this forum it was a bunch of happy friendly folks. Now I'm afraid the tone has become not unlike many faceless forums where trolls lurk in wait and are eager to attack others without any consequence or accountability. Not a good sign when a community gets to that.

Cheers!

[natsb88]

After all, nowhere else in the world trades metals but in the Copper Cave. The precipitous drop in silver prices from the peak near $50 was only from the disconnected fictitious "paper traders"....until it wasn't...all the way down

I don't recall saying anything of the sort. For someone who frequently complains about others twisting your words, you are quite masterful at it yourself

My narrative was simply an agreement with Market Harmony. The short-term volatility of silver spot does not seem to reflect real physical supply and real physical demand. It raises questions. The paper market, ANY paper market, just due to the nature of electronic trading and cash-out clauses/options for unbacked contracts, is vulnerable to other forces (nefarious or not). You said yourself that only 10% of physical silver is used for investment/collection purposes. If 90% of silver trades were industrial buyers purchasing silver for consumption, I would not expect to see such significant non-event-based fluctuations. If news broke that a major mine caved in or a supply country blocked exports, or somebody discovered a gigantic pile of recoverable silver only 5' under the surface, then sure. But that's not what we have here. The proportion of traders to consumers in the paper market is way out of whack from the physical market. The paper price is driven more by speculation, by institutions looking to make a buck churning paper, institutions that have no interest in actual tangible metal, than it is by real physical supply and demand. Since the paper market has its roots in the physical market the two are still connected, but it's more like by a bungee cord than a solid link. On every major drop over the last few years we have seen the gap between paper and physical (actual obtainable retail physical, not 1000 oz bars in a COMEX vault) stretch a little further and take a little bit longer to return than on the previous drop. If you have ever used a bungee cord, you'll know that over time they tend to lose their elasticity, and eventually break. It may not happen today, tomorrow, this year, or this decade, but if we continue to see this type of violent speculatory activity in the paper markets, is it not reasonable to believe that the bungee cord may eventually give way?

JFF, I am not making any personal attacks, I am not calling your motives into question, and I am not twisting your words. I am simply presenting my thoughts in a meaningful discussion. If you choose to reply directly to my post, I respectfully ask that you refrain from the tired "you're a physical dealer so everything you say is biased" mantra and instead focus on the actual issue of discussion. There is no need for this to devolve into a petty contest of who can get the last word in, it's a waste of everyone's time.

[Jonflyfish]

JFF, I am not making any personal attacks, I am not calling your motives into question, and I am not twisting your words. I am simply presenting my thoughts in a meaningful discussion. If you choose to reply directly to my post, I respectfully ask that you refrain from the tired "you're a physical dealer so everything you say is biased" mantra and instead focus on the actual issue of discussion. There is no need for this to devolve into a petty contest of who can get the last word in, it's a waste of everyone's time.

Um, I disagree. Your "Narrative" to MH was without any doubt obviously mimicking my comments with twisted untrue undertones and false suggestion of what I have actually stated. I am unbiased and do not have a conflict of interest. I don't need to pump a story or feed people's minds into buying (or selling). Supposition and speculative story telling does not make anything come true either.
Also, I don't have time to read everything you posted but I did notice this- " You said yourself that only 10% of physical silver is used for investment/collection purposes..."
What I said was that about 10% was used to produce coins and medals. It is far easier and more economic to invest in industrial lots at spot for large positions than to ask a mint to punch out a few million ounce chips.


Truth in price.
Cheers!

[natsb88]

JFF, I am not making any personal attacks, I am not calling your motives into question, and I am not twisting your words. I am simply presenting my thoughts in a meaningful discussion. If you choose to reply directly to my post, I respectfully ask that you refrain from the tired "you're a physical dealer so everything you say is biased" mantra and instead focus on the actual issue of discussion. There is no need for this to devolve into a petty contest of who can get the last word in, it's a waste of everyone's time.

Um, I disagree. Your "Narrative" to MH was without any doubt obviously mimicking my comments with twisted untrue undertones and false suggestion of what I have actually stated. I am unbiased and do not have a conflict of interest. I don't need to pump a story or feed people's minds into buying (or selling). Supposition and speculative story telling does not make anything come true either.
Truth in price.
Cheers!

Obviously my original post was mocking. The post immediately proceeding this one was not. But you chose to completely ignore the issue at hand and redirect attention to a personal level instead. Cheers!