Imminent Silver Correction

[franklin]

"In fact, it would only take the existing fiat base of a handful of some of the largest hedge funds to accumulate the entire physical supply..."

Almost all. I'm not selling.

[franklin]

Even if there is a 25-30% correction, what would that take it back to? Last month's prices?

[Lemon Thrower]

inevitable is not the same as imminent.

[BullionStar]

A price rise of (give or take) 50% for the year is pretty exceptional. I'd expect a correction soon, which perhaps qualifies as one of the most useless statements I have made!

But as my favourite market adage goes, "The market can stay irrational longer than you can stay solvent". And as such you can bet the market is littered with the bodies of those who went short at $30, $35 & $40.

But one thing I will share here is that even though my precious metals site is seeing really strong traffic at the moment, the number of transactions is falling. Previously, over the last 2 years or so, when this has happened it has shown that rallys are getting tired.

[beauanderos]

A price rise of (give or take) 50% for the year is pretty exceptional. I'd expect a correction soon, which perhaps qualifies as one of the most useless statements I have made!

But as my favourite market adage goes, "The market can stay irrational longer than you can stay solvent". And as such you can bet the market is littered with the bodies of those who went short at $30, $35 & $40.

But one thing I will share here is that even though my precious metals site is seeing really strong traffic at the moment, the number of transactions is falling. Previously, over the last 2 years or so, when this has happened it has shown that rallys are getting tired.

A price rise of 50% for the year would normally be considered exceptional. Silver is extended well beyond its 200 moving day average. If circumstances were "normal" then these indicators could very well be harbingers of a soon-to-follow correction. How instructive, though, is technical analysis when comparing events that occurred in the past, during relative economic stability, and trying to make unfolding events within a highly inflationary milieu fit into a box that would be predictive of imminent occurrences? One size does not fit all. I am not saying a pullback, minor or of magnitude, is not going to occur, I am stating that using technical analysis under these circumstances is of limited usefulness, because a perhaps significant impetus to what is driving this market is a repricing of silver due to the rapidly accelerating catalyst of a depreciating dollar simultaneously with the destructive devaluation of global fiat currencies.

[Lemon Thrower]

draw your own conclusions. i do not assume that past performance indicates the future. the bottom haof of the chart is most concerning.

[highroller4321]

No more adding for this shot. Stops are all set @ 47.77

Another 3% rise and your shorts will be called.

[beauanderos]

is there any way to show the same chart but adjusted for inflation? And not using phony govt CPI indices, but genuine tracking such as is compiled by John Williams of Shadowstats.com? I know that silver is running away even from the increased money supply, but I'm sure the amplitude of the differential from 200MDA would not be as great as suggested by the chart provided. However, if accurate info was available then it might be imprudent to ignore what would be a more reliable indicator of a potential pullback in silver's price. I do think that regardless of whether such indicators are accurate or not... if investors believe that they are then they will influence their actions and could result in a form of self-fulfilling prophecy. However, my fear is that the greatest risk is missing the huge potential rise remaining by being overly wary, thus my intent is to ride out the volatility, weathering whatever storms ensue, with the conviction that sunny days will ultimately prevail in the long term. Each individual needs to know their own risk tolerance and be guided forthwith. It might prove wise for undercapitalized investors to pull some off the table at this point in time to preserve their gains, but for my part I think any pullback will be of short duration and that the usual seasonal weakness may manifest itself in a sideways trading rangebound pattern rather than a severe sustained correction.

[68Camaro]

A price rise of (give or take) 50% for the year is pretty exceptional. I'd expect a correction soon, which perhaps qualifies as one of the most useless statements I have made!

But as my favourite market adage goes, "The market can stay irrational longer than you can stay solvent". And as such you can bet the market is littered with the bodies of those who went short at $30, $35 & $40.

But one thing I will share here is that even though my precious metals site is seeing really strong traffic at the moment, the number of transactions is falling. Previously, over the last 2 years or so, when this has happened it has shown that rallys are getting tired.

A price rise of 50% for the year would normally be considered exceptional. Silver is extended well beyond its 200 moving day average. If circumstances were "normal" then these indicators could very well be harbingers of a soon-to-follow correction. How instructive, though, is technical analysis when comparing events that occurred in the past, during relative economic stability, and trying to make unfolding events within a highly inflationary milieu fit into a box that would be predictive of imminent occurrences? One size does not fit all. I am not saying a pullback, minor or of magnitude, is not going to occur, I am stating that using technical analysis under these circumstances is of limited usefulness, because a perhaps significant impetus to what is driving this market is a repricing of silver due to the rapidly accelerating catalyst of a depreciating dollar simultaneously with the destructive devaluation of global fiat currencies.

Well put Ray...

[Lemon Thrower]

is there any way to show the same chart but adjusted for inflation?

yes, but it will require some work on your part.

the point of the chart is short term trends relative to the moving average. the bearish thing is that we are in uncharted territory in terms of deviations from the m.a. the bullish thing is the price usually returns to the m.a. and not below.

charts like this can paint a good picture of data but that data is useful regarding the future only if you assume the future will be similar to the past. it usually is but the really interesting times are when it is not.

[Jonflyfish]

The price advance is now very tenuous and suspect. The risk is clearly to the downside.

[inflationhawk]

The price advance is now very tenuous and suspect. The risk is clearly to the downside.

The market can stay irrational longer than most short sellers can remain solvent. Good luck. I hate to see anyone lose their shirt. I think your probably right, but I'm not stepping in front of this freight train. At best, I might sell some soon and swap into gold. If we get a correction before that happens, oh well, I'll just wait longer and sell when the gold silver ratio gets in the 20s. Metals are still the place to be longer term.

[Lemon Thrower]

whenever someone uses the word "clearly," usually what follows is anything but.

[inflationhawk]

whenever someone uses the word "clearly," usually what follows is anything but.

Clearly

[fb101]

Clary Cleary Clerly Clealy Cealry
forget it

[Country]

So do we think the dollar will get strong as pressure builds to raise interest rates to be competitive with other currencies. Rates go up, then the ability for US to even pay the interest will become impossible. Interest payments are approaching an unsustainable point of equaling our GDP. Print more money to pay debt and inflation skyrockets and Silver will only go one direction. I think smart and big money is moving into Silver. If there is a correction it may be upward to historical gold-silver ratios.

The fiat currency battle is still about interest rates. When the fed signals rate bias changes, you will see USD exchange rates strengthening. Smart and big money cannot allocate out of USD and into silver. Very little of the entire fiat base globally has allocated into silver. Many trillions in fiat. A few hundred million ounces of silver x 30, 40, 50, 200 or even 1000 can't come close in replacement to the current fiat base. Silver is a very tiny market in comparison. In fact, it would only take the existing fiat base of a handful of some of the largest hedge funds to accumulate the entire physical supply, which is a very tiny fraction of the fiat community.

That is a good reason why one should own a reasonable amount of GOLD. The fiat community will race to GOLD, to the extent that they can obtain it, as their alternate "out of USD" store of wealth.

[DeanStockwell]

Phew. This week has not been a good one paper wise.
Thankfully the losses in the put spread have been mitigated by spreads in MRO, MMS, and SIX, including my core stack of bullion.

Do not be quick to denounce JFF's prediction...If his stops have not been adjusted then he is still in and has not yet been proven wrong.
I run with tight stops so I'm out of my put spread after those early losses in the week, and because I don't want to hold my position for three days over the weekend. I'll admit I got in at the wrong time. Yet, my situation again shows the importance of stops when trading.

Seeing lots of nice opportunities in the stocks now, but I still believe we are going to see a very large correction. Like them or not, technicals have a knack for calling corrections; and everyday we see silver technicals getting more and more bearish. I am keeping much of my powder dry; ready to snatch up deals that will ensue in the panic selling if the Big One comes.

[68Camaro]

That is a good reason why one should own a reasonable amount of GOLD. The fiat community will race to GOLD, to the extent that they can obtain it, as their alternate "out of USD" store of wealth.

And it will go to stable and/or gold-back currencies, even if not 100% backed. Swiss Franc, Chinese yuan, etc. It only takes even a fraction of the overflow to be enough to continue to carry silver (and gold) upward. The USD is walking dead as a reserve currency. It's just a matter of time.

[68Camaro]

...but I still believe we are going to see a very large correction. Like them or not, technicals have a knack for calling corrections; and everyday we see silver technicals getting more and more bearish. I am keeping much of my powder dry; ready to snatch up deals that will ensue in the panic selling if the Big One comes.

Makes sense to have some reserve for pickings, regardless of the type of correction.

What the thing is that will "correct" remains to be seen, and when is a big question, and both will only be seen, and obvious (to some), in hindsight. Unfortunately a lot of the info that would make for a truly informed decision is kept tight, and will only be available to the future.

And if technical analysis fails in this, that itself will also only be obvious in hindsight.

[Jonflyfish]

Not able to keep enough updates here. Have been extremely busy trading. Have been positioning short a bit early ahead of the correction. However, when capitulation happens it is nearly impossible to build a position in opposite. Still highly leveraged short from higher and holding for lower. Selling on rallies is the preferred bias as the critical $40 handle is targeted.

Cheers

[DeanStockwell]

Good to see you back JFF!
Hope you made some good money last week. Lots of opportunity from that bernanke-induced sugar high.

[RxForPain]

Gold and silver are just correcting. Hold what you have unless you cannot take a loss, that simple! If you are in for the long haul hold tight and buckle your seatbelt for the ride, it will be have a few bumps.

Look at the world around us at this point. The US dollar is nearing record lows and do you see the US government doing anything, but building more debt. The Fed. is printing more $$$ each day. The cost of oil and all our other basic needs are going up. Check your grocery bill and it is obvious. The European debt is added to this along with the instability in multiple nations around the world.

Don't panic... We're going to see these corrections as the silver prices go up in such quick amounts. Unless you really believe the US and Europe are ready to deal with their debt and cut spending/printing there is nothing to fear.

Hold tight and watch. Add to your stack as you can and watch. Buy the dips and watch. The game is about the winner at the end not the in between back and forth. The physical you own will try to be pulled out of your hands with corrections and scare tactics, if you let them take it.

Beans, water, bullets, and PM's will win in the end. Ask yourself... do you want to win the battle or the war?

[Jonflyfish]

Good to see you back JFF!
Hope you made some good money last week. Lots of opportunity from that bernanke-induced sugar high.

Thanks Dean. Been crushing it hard. The technicals are clear and simple when swing trading inside the volatility (money maker)
Trading this market has been like stealing candy from kids- almost unfair.

Cheers!

[moneydog]

Silver at $43.95 is flashing the warning lights for an imminent correction.
Maybe I'll be 100% wrong but something tells me otherwise.

Cheers.

buy it slowly on way down then wait

[Jonflyfish]

Silver at $43.95 is flashing the warning lights for an imminent correction.
Maybe I'll be 100% wrong but something tells me otherwise.

Cheers.

buy it slowly on way down then wait

The future is unknowable so I just stick to a systematic disciplined approach. These volatile markets are a surreal dream come true- pinch pinch!