SILVER - WAS $31-$49, WAS $33-$43, NOW $44+

[theo]

I would think that the dollar would be up a lot more during sell off like this. It is up a mere .05 on the DXY.

[frugi]

I hope silver drops another $35.00, and HappY Workers Day/May day to evryone, es[ecially any Communists we have here. haha.

[68Camaro]

I would think that the dollar would be up a lot more during sell off like this. It is up a mere .05 on the DXY.

Sometimes there's a correlation, but this sell-off has nothing to do with the dollar.

It drops 6 in seconds, back up nearly 2. Schizoid behavior, in normal circumstances. But this is manipulation.

[Country]

This is a thinly traded futures market event. Sometime these drops occur because someone sold many more futures contracts by mistake. The outcome of these drops is that stops are hit which causes further cascading selling, especially if it is driven by computer designed program selling that kicks in. Remember the flash crash in the NYSE when the dow dropped 800 points in a few minutes. I think this could be a SILVER FLASH-CRASH event. If this is the case, we should see a quick rebound by morning as buyers see this event as an opportunity caused by someone's foolish mistake.

Since GOLD is hardly down, the USD is hardly up, and crude is only down 50c, I believe we have just witnessed a SILVER-FLASH-CRASH.

[68Camaro]

Gold did a similar thing, only difference was that it initially went up first.

[Country]

Definitely looks like a computer driven flash crash. SILVER DOWN ONLY $2.82 TO $45.12 as of right now. USD dollar weakening again, GOLD and crude coming back too. I hope it will fully recover by morning.

Just like the stops were hit on the downside causing cascading selling, the stops are now being hit on the upside causing rapid buying programs to kick in.

[neilgin1]

oh! dont be surprised if this market closes higher.

this is how the big 4 get long.....who you thinks buying every weak long out beneath 48? the big 4,

get long long long.......watch out coz a default might be the thing the gummit uses to ban private ownership......fixes the price, some
nefarious device......which is okay coz i dont own any silver. wish i did, tyhink bout a lot, talk to forums coz i wish i did own it, but writing on forums in the next best thing......we punch thru 50 today....even steven.

[68Camaro]

oh! dont be surprised if this market closes higher.

this is how the big 4 get long.....who you thinks buying every weak long out beneath 48? the big 4,

get long long long.......watch out coz a default might be the thing the gummit uses to ban private ownership......fixes the price, some
nefarious device......which is okay coz i dont own any silver. wish i did, tyhink bout a lot, talk to forums coz i wish i did own it, but writing on forums in the next best thing......we punch thru 50 today....even steven.

Yeah - wished I owned some... Glad I can pretend via this forum...

[justj2k78]

oh! dont be surprised if this market closes higher.

this is how the big 4 get long.....who you thinks buying every weak long out beneath 48? the big 4,

get long long long.......watch out coz a default might be the thing the gummit uses to ban private ownership......fixes the price, some
nefarious device......which is okay coz i dont own any silver. wish i did, tyhink bout a lot, talk to forums coz i wish i did own it, but writing on forums in the next best thing......we punch thru 50 today....even steven.

Yeah - wished I owned some... Glad I can pretend via this forum...

It's nice to have a place where we can all act like we own silver. I know a guy who knows a guy who has some, though!

[DeanStockwell]

Buy at any price below $44.50 for a short term(think intraday) trade.
EDIT: Meant $44.50 and not $43.50

[beauanderos]

it's an overall commodities sell-off. check out oil, gold, and silver together. yes, silver is down 5% compared to 1-2% for gold. and oil is down 1%. however, the chart patterns are the same, it doesnt look like pure silver manipulation to me

Most hedgies have exposure to all those markets. Severe pressure in one affects the others, perhaps by requiring increased silver margins to be met by selling in other commodities.

[henrysmedford]

SINGAPORE May 2 (Reuters) - Silver prices tumbled by 10 percent early on Monday, with spot prices sliding to as low as $42.58 an ounce and futures dipping to $42.20 in volatile, holiday-thinned trade.

By 0009 GMT, spot silver stood at $43.32 an ounce, down 9.4 percent on the day, while COMEX silver for July delivery SIcv1 traded at $44.075 an ounce versus $48.599 on Friday.

"The reduction in COMEX length before the weekend, margin increase and holidays in large parts of Asia and Europe set the stage for a move like this," said Natalie Robertson, analyst at ANZ in Melbourne.

Speculators scaled back their bullish bets in COMEX silver futures and options to the lowest level since early February, regulator data showed on Friday. [ID:nN29175149]

Speculators in COMEX silver held a net long position 25,791 lots in the week ending April 26, cutting 5,413 lots, data from the Commodity Futures Trading Commission (CFTC) showed.

The CME Group Inc said on Thursday it would raise maintenance margins for COMEX silver futures by 13.2 percent to $10,750 per contract from $9,500 effective Friday, April 29.

Spot gold prices fell 0.7 percent to $1,552.30 an ounce, after earlier touching an all-time high of $1,575.79.

Some traders put silver's spectacular fall down to an unwind of a short gold-silver ratio position, compounded by automated stop-loss orders.

"Precious metals basically turned around in illiquid markets on snippets of news that suggest that the risk profile will change," said Jonathan Barratt, managing director at Commodity Broking Services in Sydney.

"Silver was also off the board in terms of technicals and the market decided to just smack it in the head." (Reporting by Nick Trevethan and Alejandro Barbajosa; Editing by Michael Urquhart)

[DeanStockwell]

Buy when silver hits the 20 day moving average; at least that's my plan.

[Market Harmony]

SINGAPORE May 2 (Reuters) - Silver prices tumbled by 10 percent early on Monday...

Some traders put silver's spectacular fall down to an unwind of a short gold-silver ratio position, compounded by automated stop-loss orders...

This explanation seems to be the most practical when considering trading and hedging mentality. Since plunging from a 3 year average of just under 65, the GSR (gold to silver ratio) is currently at 32.66, with the 3 year average GSR still above 60. This spread makes a very good arbitrage opportunity whereby you short silver, and go long gold at the same time, and realize your profit as the GSR finds a new equilibrium with gold price. The historical GSR is 15:1... we all know that, but that ratio will not be obtained overnight, or even in a few months. The GSR will fluctuate, and that is why traders look to this kind of chart to get an idea of the amplitude of the current move:



The blue trend line is a 3 year (150 week) simple moving average of the GSR ratio.

In 2008, as the world flocked to the dollar for safety, PM's took a big hit. Silver took it on the chin but gold held up much better. Had you been short silver long gold, then you would have seen a profit of about 43% trough to peak (Jul to Oct 2008). If a similar scenario were to take place today, the GSR would trend towards a ratio of 46:1.

As a trader, this is an easy bet to make. Go long gold and short silver. And for those that had long positions in silver and set trailing stops, then action like this morning will wipe out those stops and get those silver holders out of their positions (and into the dollar). As these stops are hit, then the price continues to fall, triggering more stops. This will make silver weaker and the dollars stronger. Or, if these traders have set orders in place, then the sale of one position may trigger the purchase of another (such as gold). Alternatively, pure speculators in silver will have set limit buy orders at price levels down the chart and care not about the GSR.

It's not about your reaction, it's about how you plan for potential outcomes.

[68Camaro]

Volatility... Yawn.

There are those that can/will make (and lose) money off the volatility.

But bottom line is that gold is still essentially at a record high, and silver is still at 45+ and quickly climbing back to its recent trading range after another fast take-down attempt.

[Morsecode]

Volatility... Yawn.

There are those that can/will make (and lose) money off the volatility.

But bottom line is that gold is still essentially at a record high, and silver is still at 45+ and quickly climbing back to its recent trading range after another fast take-down attempt.

Yep.

[beauanderos]

Wouldn't surprise me in the least to see the NY desk attempt to crush the price down to $39 or so.

[shinnosuke]

But Ag appears to be steadily climbing out of the hole this morning.

[68Camaro]

But Ag appears to be steadily climbing out of the hole this morning.

Yep, back up to the current trading range. They will still attempt another smackdown, I believe. I don't think it will have as large an affect as the one last night.

[marhjan]

Correction??? What correction?? Hold on for the ride...

[kiwiman]

Correction??? What correction?? Hold on for the ride...

this correction http://www.kitcosilver.com/

[68Camaro]

Yep, it corrected...

[HoardCopperByTheTon]

Wow.. this thread has gotten kind of quiet. It's all my fault.. I bought some silver from a fellow member. I knew I could turn the market.

Are you ready for the "dead cat bounce?" If dropped from high enough.. even a dead cat will bounce.

[Nickelmeister]

Wow.. this thread has gotten kind of quiet. It's all my fault.. I bought some silver from a fellow member. I knew I could turn the market.

Are you ready for the "dead cat bounce?" If dropped from high enough.. even a dead cat will bounce.

I finally understand your avatar

[68Camaro]

Wow.. this thread has gotten kind of quiet. It's all my fault.. I bought some silver from a fellow member. I knew I could turn the market.

Are you ready for the "dead cat bounce?" If dropped from high enough.. even a dead cat will bounce.

I finally understand your avatar

Ah - so that is what that is...