Silver

[jefftheshark]

Anybody watching what's going on here?

The bubble's expanding really fast with all the press the JPM naked short issue is getting. It seems that they are short more silver than currently exists in the world and every dollar it goes up in price makes it more likely it could scuttle the bank.

On the other hand, the FED is going to fight this tooth and nail, as high silver and gold prices are the death knell of the dollar.

So the question is: Which side is going to win?

It's hard to see fighting the FED and their unlimited printing press, and yet they are not larger than the market itself and this thing could be a gigantic black hole (or Black Swan?) that gobbles up everything of value in America.

So my second question is: Am I reading too much on the internet because the darn Cardinals suck, or is anyone else out there in ASFN-land wondering what in the hell is going on too?

JTS

 

[Shane]

Anybody watching what's going on here?

The bubble's expanding really fast with all the press the JPM naked short issue is getting. It seems that they are short more silver than currently exists in the world and every dollar it goes up in price makes it more likely it could scuttle the bank.

On the other hand, the FED is going to fight this tooth and nail, as high silver and gold prices are the death knell of the dollar.

So the question is: Which side is going to win?

It's hard to see fighting the FED and their unlimited printing press, and yet they are not larger than the market itself and this thing could be a gigantic black hole (or Black Swan?) that gobbles up everything of value in America.

So my second question is: Am I reading too much on the internet because the darn Cardinals suck, or is anyone else out there in ASFN-land wondering what in the hell is going on too?

JTS

Have you been to a game this year? If so how come you haven't told me so we can meet for a drink?

 

[jefftheshark]

Have you been to a game this year? If so how come you haven't told me so we can meet for a drink?

You know I never go anywhere without telling you first.

But no games this season, I made the decision in July that I wasn't going to take my half of the tickets, so the guys selected a different aquatic predator to join them this year.

From what I understand, "Barracuda" is pretty f'ing funny so I'm not sure I'll get the tickets back next season if I've been replaced. I might have to beg you to take me, although you're probably far too smart to make that mistake.

JTS

Although what this has to do with "silver" is beyond me, unless you were speaking about Coor's Silver Bullets, or better yet Patron.

 

[Shane]

You know I never go anywhere without telling you first.

But no games this season, I made the decision in July that I wasn't going to take my half of the tickets, so the guys selected a different aquatic predator to join them this year.

From what I understand, "Barracuda" is pretty f'ing funny so I'm not sure I'll get the tickets back next season if I've been replaced. I might have to beg you to take me, although you're probably far too smart to make that mistake.

JTS

Although what this has to do with "silver" is beyond me, unless you were speaking about Coor's Silver Bullets, or better yet Patron.

Well trust me all 5 trips this year have been pretty tryin gon my nerves. You are probably better off.

 

[LVG]

Anybody watching what's going on here?

The bubble's expanding really fast with all the press the JPM naked short issue is getting. It seems that they are short more silver than currently exists in the world and every dollar it goes up in price makes it more likely it could scuttle the bank.

On the other hand, the FED is going to fight this tooth and nail, as high silver and gold prices are the death knell of the dollar.

So the question is: Which side is going to win?

It's hard to see fighting the FED and their unlimited printing press, and yet they are not larger than the market itself and this thing could be a gigantic black hole (or Black Swan?) that gobbles up everything of value in America.

So my second question is: Am I reading too much on the internet because the darn Cardinals suck, or is anyone else out there in ASFN-land wondering what in the hell is going on too?

JTS

I've been watching silver for a bit now. I'm interested in seeing how the JPM issue is going to work itself out, as since we still don't know (due to the government's failure to regulate derivatives) how many banks are interconnected with JPM what the consequences would be for it's failure.

A systemic cascading failure - it's the thing that I fear most with our current system. That's what TARP prevented the first time around, but it with the absolute failure of Financial Reform to address any of the root causes, it's still a very real possibility.

I wouldn't be surprised if we saw TARP 2.0 in the next 2 years.

I'm not sure what the Fed could do to knock down the price of PM's. I read an article (yesterday, IIRC) that China was buying massive amounts of physical gold - somewhere around 4x's over previous year levels. Eventually, supply and demand catch up with you.

 

[LVG]

Fell $2.00 today. Whee!

 

[conraddobler]

Fell $2.00 today. Whee!

As I've said a couple of times, this is loaded with risk.

The problem is not the real supply of silver, it's how easy it is to create an artificial / real short in silver.

They have an unlimited supply of money with which to short it and it's not just them it's anyone who observes the trade is getting too crowded on the long or short side.

The FED can start the ball rolling through it's proxies and then watch the hedge funds annihilate the longs.

This isn't going to happen until someone decides it needs to happen, then it's the down elevator.

You have to watch your entry and your cost basis on this stuff, then decide what kind of trade it is, long term hold, long term short, or just daytrading or whatever, then set stops and get out when you're wrong at the target point you set as defining wrong.

When silver was $8 it was an easy long term bet IMO, now I have no idea.

None of this is trading advice.

 

[jefftheshark]

As I've said a couple of times, this is loaded with risk.

The problem is not the real supply of silver, it's how easy it is to create an artificial / real short in silver.

They have an unlimited supply of money with which to short it and it's not just them it's anyone who observes the trade is getting too crowded on the long or short side.

The FED can start the ball rolling through it's proxies and then watch the hedge funds annihilate the longs.

This isn't going to happen until someone decides it needs to happen, then it's the down elevator.

You have to watch your entry and your cost basis on this stuff, then decide what kind of trade it is, long term hold, long term short, or just daytrading or whatever, then set stops and get out when you're wrong at the target point you set as defining wrong.

When silver was $8 it was an easy long term bet IMO, now I have no idea.

None of this is trading advice.

I sold SLV on Friday (the long stuff) and went short (ZSL) and watched in horror as it hit over $30. I added to my short and then between yesterday and today saw a great move to the downside where I cashed out a few moments ago.

So I guess I'm a daytrader now.

I have a target in mind for it to go down to and then I think I'm long again, although probably entering into the position a little bit at a time.

As far as I'm concerned I'd like to see the battle continue for a while and let the price bounce between 27 and 30 and just play the sides while in the middle. I did this two years ago with DIG & DUG and it worked out quite nicely.

As usual, this is not advice, just putting it out there what I'm thinking and because I like to hear what you are all thinking as well.

Thanks!

JTS

 

[Shane]

I sold SLV on Friday (the long stuff) and went short (ZSL) and watched in horror as it hit over $30. I added to my short and then between yesterday and today saw a great move to the downside where I cashed out a few moments ago.

So I guess I'm a daytrader now.

I have a target in mind for it to go down to and then I think I'm long again, although probably entering into the position a little bit at a time.

As far as I'm concerned I'd like to see the battle continue for a while and let the price bounce between 27 and 30 and just play the sides while in the middle. I did this two years ago with DIG & DUG and it worked out quite nicely.

As usual, this is not advice, just putting it out there what I'm thinking and because I like to hear what you are all thinking as well.

Thanks!

JTS

So just how much am I gonna have to float you in order to get in on this and actually make some money??

 

[conraddobler]

I sold SLV on Friday (the long stuff) and went short (ZSL) and watched in horror as it hit over $30. I added to my short and then between yesterday and today saw a great move to the downside where I cashed out a few moments ago.

So I guess I'm a daytrader now.

I have a target in mind for it to go down to and then I think I'm long again, although probably entering into the position a little bit at a time.

As far as I'm concerned I'd like to see the battle continue for a while and let the price bounce between 27 and 30 and just play the sides while in the middle. I did this two years ago with DIG & DUG and it worked out quite nicely.

As usual, this is not advice, just putting it out there what I'm thinking and because I like to hear what you are all thinking as well.

Thanks!

JTS

I'm thinking that one huge driver of this would be if the tax cut bill dies.

Basically that's the last inflationary gasp IMO, then when Con gress is sworn in and the Pubs take over the house I expect the spending brakes to be applied.

There's still epic housing damage to deal with and the banks are going to get totally wiped out if the yields on treasuries continue to soar they'll be totally hosed down.

Remember a lot of them were borrowing heavy IMO from the FED near zero and then buying treasuries for the yield but if you watched the 10 year yield zoom a percent in a matter of less than a month that's crushing their principal.

I see an EPIC short here on earnings, depends on who was dipping into that til the hardest.

Also if the tax cut bill goes through, look for yields to resume their rocket ride up for another few months and when it's done I expect nuclear devastation from what I mentioned before and also a possible fast unwind of our own carry trade on the dollar strength the yields are causing.

Dollar goes up, it rains on your carry trade because the FX losses wipe our your yield since a carry is really a short on the currency.


Not trading advice.

 

[jefftheshark]

So just how much am I gonna have to float you in order to get in on this and actually make some money??

There are 3 things you can never get involved with: A land war in Asia, a wager with a Sicilian when death is on the line and taking stock advice from some guy named "The Shark" on the internet.

I'm thinking that one huge driver of this would be if the tax cut bill dies.

Basically that's the last inflationary gasp IMO, then when Con gress is sworn in and the Pubs take over the house I expect the spending brakes to be applied.

There's still epic housing damage to deal with and the banks are going to get totally wiped out if the yields on treasuries continue to soar they'll be totally hosed down.

Remember a lot of them were borrowing heavy IMO from the FED near zero and then buying treasuries for the yield but if you watched the 10 year yield zoom a percent in a matter of less than a month that's crushing their principal.

I see an EPIC short here on earnings, depends on who was dipping into that til the hardest.

Also if the tax cut bill goes through, look for yields to resume their rocket ride up for another few months and when it's done I expect nuclear devastation from what I mentioned before and also a possible fast unwind of our own carry trade on the dollar strength the yields are causing.

Dollar goes up, it rains on your carry trade because the FX losses wipe our your yield since a carry is really a short on the currency.


Not trading advice.

Today gave us a preview of what will happen if the tax bill really dies. In one minute today, silver lost about 3%.

I know this isn't a new thought, but there is almost no way to trade this market except for momentum daytrading kind of stuff, which is what I'm doing. Fundamentals have been out the window for a while and now technicals are SOL as well. I haven't looked at a 3 month chart in a couple of months, I now look at only one day, or two day max and even with a one minute candle, you can't get a feel for crap. SLV mini-flashed today and anybody who had stops or limits within 2.5% were probably triggered and then either very surprised or very unhappy.

You are echoing my thoughts as well about the bond vigilantes and yields, I guess you've seen what the 30 has done to mgt. rates (being in the biz ) Increased interest carry could eat Mr. B very quickly if he doesn't watch out. (if you saw him on 60 minutes you have to wonder if even has a clue he's so far out on a limb)

The biggest problem is see is a repeat of late '08 where suddenly, nothing has any value because there is nothing to peg it to.

Of course we lived through that, too - and it created a great buying opportunity, at least for those either brave enough or stupid enough to buy.

JTS

 

[Matt L]

This guy likes silver (and gold)

 

[Shane]

There are 3 things you can never get involved with: A land war in Asia, a wager with a Sicilian when death is on the line and taking stock advice from some guy named "The Shark" on the internet.

Thought I was gonna get rich.....

 

[conraddobler]

There are 3 things you can never get involved with: A land war in Asia, a wager with a Sicilian when death is on the line and taking stock advice from some guy named "The Shark" on the internet.



Today gave us a preview of what will happen if the tax bill really dies. In one minute today, silver lost about 3%.

I know this isn't a new thought, but there is almost no way to trade this market except for momentum daytrading kind of stuff, which is what I'm doing. Fundamentals have been out the window for a while and now technicals are SOL as well. I haven't looked at a 3 month chart in a couple of months, I now look at only one day, or two day max and even with a one minute candle, you can't get a feel for crap. SLV mini-flashed today and anybody who had stops or limits within 2.5% were probably triggered and then either very surprised or very unhappy.

You are echoing my thoughts as well about the bond vigilantes and yields, I guess you've seen what the 30 has done to mgt. rates (being in the biz ) Increased interest carry could eat Mr. B very quickly if he doesn't watch out. (if you saw him on 60 minutes you have to wonder if even has a clue he's so far out on a limb)

The biggest problem is see is a repeat of late '08 where suddenly, nothing has any value because there is nothing to peg it to.

Of course we lived through that, too - and it created a great buying opportunity, at least for those either brave enough or stupid enough to buy.

JTS

Yeah the ultimate hysterical irony of all this FED speak is that QE2 was touted as keeping yields lower.

OOOPS.

They have to chose, the stock market or the bond market.

You can't save both, actually I don't think you can save either truly.

We're right on schedule with the brick wall.

It's like watching a car crash in super slow motion, just because you can go out and get a slurpy, have dinner, go to sleep and wake up and still barely tell the scene has moved forward, the end result is the same and it's going to be fugly.

 

[jefftheshark]

Yeah the ultimate hysterical irony of all this FED speak is that QE2 was touted as keeping yields lower.

OOOPS.

They have to chose, the stock market or the bond market.

You can't save both, actually I don't think you can save either truly.

We're right on schedule with the brick wall.

It's like watching a car crash in super slow motion, just because you can go out and get a slurpy, have dinner, go to sleep and wake up and still barely tell the scene has moved forward, the end result is the same and it's going to be fugly.

Does it appear to you that they have lost their death-grip on Treasuries? The 10 year hit over 3.5% today. The FED might find out there is not enough electrons in the universe to fill a black hole.

So it's time to dust off the old "deflationist" theory I guess. Silver got close to the magic $30 and it was time to go short, as I did on oil (got close to magic $90) and Gold (bounced off $1400 again). Trouble in Europe, yields up in fixed income, the USA about to lose its triple-A adds up to deflation and depression once again.

At least it does today, because tomorrow it will be a completely different story. Stay nimble my friends -

JTS

 

[conraddobler]

Does it appear to you that they have lost their death-grip on Treasuries? The 10 year hit over 3.5% today. The FED might find out there is not enough electrons in the universe to fill a black hole.

So it's time to dust off the old "deflationist" theory I guess. Silver got close to the magic $30 and it was time to go short, as I did on oil (got close to magic $90) and Gold (bounced off $1400 again). Trouble in Europe, yields up in fixed income, the USA about to lose its triple-A adds up to deflation and depression once again.

At least it does today, because tomorrow it will be a completely different story. Stay nimble my friends -

JTS

Our favorite Machiavellian / moral hazzard bankers called yields on TNX to hit 3.75, and it's been screaming up towards that, I'm sure they're leaning into it too.

At this point I don't know what's the actual market and what's manipulation.

I tend to think this is all planned mostly still, but I reserve the right to be utterly wrong.

 

[LVG]

Silver has been dropping hard over the last few weeks. Thoughts?

 

[conraddobler]

Silver has been dropping hard over the last few weeks. Thoughts?

Got overbought.

This is what I meant in it wasn't necessarily a good time to buy silver when it's shooting to the moon.

I'd be a buyer after watching the chart a while waiting for the correction to bottom.

In the last couple of years it's been $31 and it's been 8$.

Buy at $8 and sell at $31 then buy again at...?

That's the hard part isn't it?

http://www.kitco.com/charts/

Go there and click on the historical silver chart then choose the 200-2011 chart, they don't allow direct links to the chart.

When you look at the chart if it ever got under $10 again I'd buy with both fists and both feet.

Unless our government stopped printing money and went all rational on me then I'd run for the hills from it for a generation.

Since our government comming to it's actual sense isn't likely to occur in my lifetime somewhere on that chart is probably a good place to buy it.

JMO, not trading advice.

BTW ultimately silver is the canary in the coal mine on a fiat currency, checkout the historical silver charts, look for the one that has the longest range covered, it's histerical, "spelling intentional" if you knew nothing else you'd figure out that somewhere in the 1970's something strange and different happened.

It's the when Nixon took us of the last vestiges of the gold standard and then OFF TO THE RACES OUR FIAT CURRENCY WENT.

It's so plain that you really have to say it's obvious.

It's also comical no one puts out much of a cohesive silver chart over a long period of time it's like dirty laundry no one wants you to see, you can discount the gigantic anomoly in the 70's it's when someone tried and almost did corner the market, just pay attention to the underlying trend of the line.

 

[jefftheshark]

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This is a gold chart (physical, not paper which would be different) which shows a classic "cup & handle" formation on the left hand side, but appears to be, at least to me, an "inverse C & H" forming right now. If this is the case, then you should see a fairly rapid popping of the bubble with prices falling to the 1100-1150 level in a matter of several weeks.

I've been short SLV since it hit $30 and although there's been some scary days (like yesterday) I'm probably in until around $24. As much as I want to be a inflationist, I just can't get over the feeling that there's no way they'll go to the well for a third QE, which would make me a deflationist I guess. I think the markets got all of QE2 now priced in, or at least it's getting close. If true, then this pigs got no where to go but down.

Of course I said the same thing in July and then they announced QE2 in August and that turned out somewhat ugly.

The truly scary thing is that the same people who piled into oil in 2008 and precipitated a lot of the ugly stuff we saw later in that year, are now piling the same way into food commodities. This will result in far more than a financial crisis, as you can start to see happening all across northern Africa right now. Just like the subprime borrowers were the canary in the coal mine for the financial meltdown which dragged in even some of the best, most credit worthy of folks, so the poorer countries which live hand to mouth predict social upheaval and the onset of war.

JTS

 

[conraddobler]

You must be registered for see images attach

This is a gold chart (physical, not paper which would be different) which shows a classic "cup & handle" formation on the left hand side, but appears to be, at least to me, an "inverse C & H" forming right now. If this is the case, then you should see a fairly rapid popping of the bubble with prices falling to the 1100-1150 level in a matter of several weeks.

I've been short SLV since it hit $30 and although there's been some scary days (like yesterday) I'm probably in until around $24. As much as I want to be a inflationist, I just can't get over the feeling that there's no way they'll go to the well for a third QE, which would make me a deflationist I guess. I think the markets got all of QE2 now priced in, or at least it's getting close. If true, then this pigs got no where to go but down.

Of course I said the same thing in July and then they announced QE2 in August and that turned out somewhat ugly.

The truly scary thing is that the same people who piled into oil in 2008 and precipitated a lot of the ugly stuff we saw later in that year, are now piling the same way into food commodities. This will result in far more than a financial crisis, as you can start to see happening all across northern Africa right now. Just like the subprime borrowers were the canary in the coal mine for the financial meltdown which dragged in even some of the best, most credit worthy of folks, so the poorer countries which live hand to mouth predict social upheaval and the onset of war.

JTS

I think the inflation deflaiton debate is just a handy way to keep people occupied.

Greatest heist in history took place and all most knowledgeable financial people could do is try and figure out if we'd get inflation or deflation.

We got both and more, but mostly we got robbed.

I posted something similar to what you just said about the poorer Arab countries rioting in that thread, pretty sad that all this has to do with greed, plain and simple.

The damage is enormous and still no one stops it.

 

[jefftheshark]

Silver went down to about $26, not the $24 I was predicting, however it popped right back to $30. There are so many rumors and crazy stuff surrounding the shiny metals, but I could see it going to $35-$37 before it ever pulls back to the mid-twenties again.

I've been in RJA, which is a basket of ten agricultural commodities (Corn, cotton, wheat, etc.) which is up close to 19% so far this year. It's currently @ 11.94 and if it pulls back a little tomorrow I'm thinking I'm going to add.

The spread between Brent and WTI is interesting, which makes me think that the dip we've seen with the Egypt peace is going to be short-lived. Iran sending warships into the Suez is bullish for DIG, or XOM.

I'm long on all of these probably through April and then I'm going to take my lead from QE3.

I'm not suggesting anyone follow me on this, but if you have a good argument as to why I'm all wet, I'd like to hear it.

JTS

PS - here's the Gold chart updated. From a technical standpoint, you would expect a pullback next week and then its off to the races.

You must be registered for see images attach

 

[conraddobler]

Silver went down to about $26, not the $24 I was predicting, however it popped right back to $30. There are so many rumors and crazy stuff surrounding the shiny metals, but I could see it going to $35-$37 before it ever pulls back to the mid-twenties again.

I've been in RJA, which is a basket of ten agricultural commodities (Corn, cotton, wheat, etc.) which is up close to 19% so far this year. It's currently @ 11.94 and if it pulls back a little tomorrow I'm thinking I'm going to add.

The spread between Brent and WTI is interesting, which makes me think that the dip we've seen with the Egypt peace is going to be short-lived. Iran sending warships into the Suez is bullish for DIG, or XOM.

I'm long on all of these probably through April and then I'm going to take my lead from QE3.

I'm not suggesting anyone follow me on this, but if you have a good argument as to why I'm all wet, I'd like to hear it.

JTS

PS - here's the Gold chart updated. From a technical standpoint, you would expect a pullback next week and then its off to the races.

You must be registered for see images attach

The price of gas is the great tell.

Just crossed 3 per here, at 4 the economy gets it again.

 

[LVG]

Well, as of this moment, silver is pushing 34, up from the recent low point of about 27 around the end of January.

Several things I've been hearing:

1. Massive short squeeze in process. Apparently, enough are tired of the manipulation.

2. Physical demand has shot through the roof, causing a disconnect between the "official" silver markets and the "physical" silver markets. 6.4 million ounces of ASE's were sold in January by the USM alone.

3. Something hinky was going on in the futures market - I really didn't understand the tech jargon, but basically it was a situation that was uncommon that underscored the desire for physical possession of silver, so the commentator said.

4. This could just be reflective of what's going on in the commodities market in general - a rising tide lifts all boats. Or, tied more specifically to another critical commodity - oil & gas prices.

FWIW.

 

[jefftheshark]

Well, as of this moment, silver is pushing 34, up from the recent low point of about 27 around the end of January.

Several things I've been hearing:

1. Massive short squeeze in process. Apparently, enough are tired of the manipulation.

2. Physical demand has shot through the roof, causing a disconnect between the "official" silver markets and the "physical" silver markets. 6.4 million ounces of ASE's were sold in January by the USM alone.

3. Something hinky was going on in the futures market - I really didn't understand the tech jargon, but basically it was a situation that was uncommon that underscored the desire for physical possession of silver, so the commentator said.

4. This could just be reflective of what's going on in the commodities market in general - a rising tide lifts all boats. Or, tied more specifically to another critical commodity - oil & gas prices.

FWIW.

It's now over 34. And going parabolic.

Silver is reverting back to its more historical ratio to gold. The reasons for this are varied but it's the combination of JP Morgan's horribly lopsided short position they inherited from Bear Stearns along with the (my opinion) idiotic calls their person in charge, Blythe Masters has made over the past two years. There is a very good chance that JPM could implode over this.

The second factor is "backwardation" which is an unusual event in futures markets where something costs more for delivery today than what it will cost months from now. This only occurs if there are concerns that something is in such short supply that you'll pay more to have it now, rather than take a chance that it won't be available tomorrow. Very rare circumstance, but its happening now with silver.

The last thing is that the people in the life rafts are beginning to see that the massive amounts of dollars they've stolen could become worthless. It's now time to get their hands on things that will be worth something when TSHTF. Gold, silver, ammo - the usual litany of the tinfoil hat wearers (who just like the broken clock - are sometimes right )

JTS

 

[conraddobler]

It's now over 34. And going parabolic.

Silver is reverting back to its more historical ratio to gold. The reasons for this are varied but it's the combination of JP Morgan's horribly lopsided short position they inherited from Bear Stearns along with the (my opinion) idiotic calls their person in charge, Blythe Masters has made over the past two years. There is a very good chance that JPM could implode over this.

The second factor is "backwardation" which is an unusual event in futures markets where something costs more for delivery today than what it will cost months from now. This only occurs if there are concerns that something is in such short supply that you'll pay more to have it now, rather than take a chance that it won't be available tomorrow. Very rare circumstance, but its happening now with silver.

The last thing is that the people in the life rafts are beginning to see that the massive amounts of dollars they've stolen could become worthless. It's now time to get their hands on things that will be worth something when TSHTF. Gold, silver, ammo - the usual litany of the tinfoil hat wearers (who just like the broken clock - are sometimes right )

JTS

That's why I always liked silver better it had the historical relationship to gold and historically it was undervalued just by that measure in relation to it, but I wasn't the only one who knew that or knows that it's relatively common knowledge and it's riding the perfect waive right now, just the right amout of doom, just the right amount of printing, just the perfect setup to go ape.

I'm glad I have what I have, wish I had more, but that goes for every home run you ever hit investing.

It would be ironic if the black swan in all this is JPM's silver short, the ultimate tin foil hat theory wins the race.

Like the Southpark where the mormons were the ones who had it right.