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The Closing Bell

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Went with a long chart for today’s update for fun.  Sign of a bubble or proof that smart money no longer has faith in the US dollar-or any fiat currency for that matter-and are hedging against inflation?

Last Friday we closed at $43.07, today we closed at $47.65 for a $4.58 gain in one week which is amazing, but not shocking.  I stated two days after our $2 dip on April 12th here that this current rally was moving at twice the speed as the last one and set to have us at $48 in two weeks, so by the 25th of this month(Monday).  Today’s closing proved that this cycle went from two 26 day periods of $8 dollar gains to a 13 day period of $8 dollar gains.  If we continue the pattern and correct down to $46 on Monday or Tuesday, the next rally will have us at $54 by May 2nd if the 13 day trend continues, the 15th if we go back to a 26 day cycle.

Personally, I feel that all bets may be off now and silver is about to do something spectacular. I know a lot of people are still calling for a correction, and I agree. Silver is due for a correction and has been for a long time…which is why the right side of the chart above is parabolic to the upside.  Silver is correcting to it’s true value and I don’t see any big corrections to the negative anytime soon, maybe a buck or two here and there, but no 20-30% corrections.

What about the fundamentals behind silver’s rise have changed?  What about our government and their reckless spending and fiscal irresponsibility has changed?  Is our debt ceiling not going to be reached next week? Did our government budget vote come easily due to everything being on the up-and-up? Has the housing market improved?  Has the unemployment rate dropped due to new jobs being created or are people simply rolling off the stat’s due to depleting their 99 weeks of benefits? Are the still-insolvent “too big to fail” financial institutions in better or worse shape now and are they lending again? Is China battling inflation and are rumors of a Yuan revaluation being passed around?  Is the dollar index on the verge of creating a new all-time low?

I think we have a long way to go before I even consider selling a single ounce of silver at this point.  Why short-sell something that has so much going for it?!

Silver did some weird stuff Wednesday after U.S. markets closed which I pointed out to some fellow silver bugs on Ferguson’s blog.  The 1min chart was showing very strange activity, nothing about that is screaming “free market” to me.  It almost looks as if there was 1 seller and 1 buyer working together to transfer silver.

It happened again yesterday after U.S. trading ended and a fellow silver bug acknowledged the unnatural moves in his silver update last night.  Glad I’m not the only one who noticed this action and was curious/a little uneasy over it.  Something is definitely going on here, we may be in for a wild ride next week.

Now look at all commodities in the graphs below and tell me they all just happen to be in a bubble at the same time and that worldwide inflation and money printing have nothing to do with it. People no longer trust paper money that can be printed out of thin air and is backed by nothing of true value.

Silver is numero uno in commodities right now and the amount of people who have any idea about silver or are investing in it is a fraction of the number of people we would need to see flock to silver to put it in a bubble. So far only the smart money is in it, once the sheep come running in we will then start to see a parabolic bubble form. Even then I wouldn’t call it a bubble with the paper silver price manipulation and obvious shortages, there will be no bubble to create if there is no product for buyers.  Those left holding physical silver in the end are going to be very happy they got in it while the getting was good.  Now if we could just get these damned miners to catch up all would be gravy, I’m very disappointed in their performance lately, but I guess that their lagging is another sign that the bulk of the market has no idea what is going on with silver.  If they did miners would be performing in tandem with the physical resources they pull out of the ground.

Click on charts to enlarge.







Should be an interesting week next week, regardless of what news does or doesn’t come out this weekend.  I am staying long miners and anything silver related.  Until the fundamentals start to change, I don’t see the point in trying to trade this volatility day-to-day since the miners don’t follow silver and even silver isn’t behaving like it used to.

The Closing Bell

[13 Minutes After Midnight]

Written by Administrator

April 22nd, 2011 at 9:49 pm

Posted in Change

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