I said the bullish move in silver would need to be significantly crushed in order to prevent an attempt on 50 and more.. The ‘crush’ came with an enormous paper tidal wave of selling starting on Tuesday and sustaining into today, thus far.. She has fallen from 44.3 to 38.8 or 5.5 points 13% in 50 hours or so. The technical damage is immense signifying a failed rejoin of the parabolic move. Where now for silver is less certain. The low supports of the prior period from 33 to 35 look to be line of sight and a period of rebuild for the instrument would be a ‘normal’ scenario. This rebuilding period would be damaging for silver miners. If the support is knocked over its anyone’s guess where next for silver. Against this we have very tight physical markets for silver.
Its an interesting dynamic this between paper markets and the physical markets and particularly how this plays into technical trading issues. We have been trained to read technicals over the last few decades. This technical trading, in a limitless paper world, is a dangerous thing as it can be manipulated. We are at a time in our history where paper is coming up against physical constraints. The breakdown of paper’s power will be immense volatility in the technicals where we swing from technical bull to bear market and back and forth. The end game in this process will be a loss in power of the paper to assert direction to markets.. This is yet to come of course.. for now we have paper looking very strong and able to direct things.. we have to respect this with our leveraged trades of course. With cash i would be happy to doubt it but make sure you get paid to wait as the process may take some time to unfold.
And so cameras, action.. over to Dr Ben..
Rich
(7 votes, average: 4.86 out of 5)
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