This page has been archived and commenting is disabled.
Downside Targets for Silver
As the CME keeps hiking the margins on Silver Future Contracts aggressively, as Tyler has been reporting here about every day now, the price of the white metal finally gets hammered, as investors are running for the hills.
It seems like every floor for the price gets taken out at the moment! As the days go by, we are getting the feel that this is becoming more than a normal correction. It looks like the first phase of the secular bull has been completed!
As we experienced with gold breaking out of phase 1 back in 2008, it also was followed with a vicious price correction, for the top around $1,030/ounce all the way down towards $700 per oz (or even a little lower intraday): a 32 percent correction!
If history can be any guide, we could expect a similar or even more aggressive price correction for silver in the coming months. With a top around $50/ounce, this delivers a potential downside target for silver of $33.5/ounce, a 5-dollar-drop from today's price.
The gold correction of 2008 started end of March and ended in the midst of November. If we project this time frame on the current silver correction, we will be probably see the lows by the beginning of 2012.
Of course, we all know that the white precious metal can be an aggressive beast when it comes to its price action. This means bigger drops in a shorter time frame.
Time for a look-up of the silver chart and what potential downside targets we could expect in the coming weeks/months.
This first downside target already is in place and will most likely be taken out, which are the 50MA and the 38.2% Fibonacci retracement level, that come together around $39.
The next Fibo retracement targets -- 50% and 61.8% -- are at $35.4 and $32 respectively.
A full Fibonacci retracement (100%) is at the last breakout of the silver price, at the intermetiade top of $21 per ounce, which would result in a 58% price crash!
Keep in mind, silver experienced similar huge corrections in the past (2008), but we think a sixty percent drop is a bridge too far this time around.
We see a good and realistic downside price target for silver laying at the current 200MA, trading at $28.2 per oz, which would result in target price of 28 dollar: a 44 percent correction from the top!
If this 10-dollar-drop for silver would take place, we think it would probably be in place already by September/October, about a half year from today.
So we repeat our advice: loosen up on your speculative positions, but be sure to keep those core silver positions in place, whatever the price correction may be!
For more of our thoughts and targets on Gold and other commodities, check out our newest release of the Commodity Report coming Monday!
Register for our Free Newsletter and follow us on Twitter.
»
- advertisements -
His mother was, so he could have been born is fucking Iran and he'd still be american. Wake the fuck up...
bad credit personal loans
It was the fault of the Japanese for allowing such a reactor to be built in that location without additional safety measures being required. That's the real story here. That and the shitty enforcement of already lax safety standards.
florida home insurance
The powerful dollar turnaround kicked in last Thursday, when things got clear that the ECB wasn ‘t prepared to hike its short term interest rate any further. This event wrecked the euro-party as most market participants were positioned for some more strength of the European currency, while further EU rate hikes were being priced in.
cheapest car insurance
The lower echelons of a tyrannical regime who are responsible for (most likely) imposing unjust rulings against the oppressed masses are now scrambling over one another in a last-ditch effort to avoid their date at the hands of the lynch mob.
car loans
I sold the physical I bought for $6.50 two weeks ago at $45.00. I think it will drop to $10.00 and then go sideways for a while. Maybe I'll buy some then. The recent run up was as obvious a speculative blow-off as ever. Anybody buying now is going to be catching a falling knife, IMHO.
I've got 8k , someone tell me when to buy (physical of course) I'm thinking 32. Need to wait till see what happens this friday and maybe till next tuesday... but I'm amatuer at guessing.
The question is: "What is your investment goal?" And the short answer is either: "To make money now," in which case you should be buying and selling PMs hourly, taking advantage of this sort of pullback by buying ZSL when silver was a $49, or, "To make money, hedge against inflation, and be prepared to cope with whatever comes along over the next 5 years," in which case you had better be long PMs because by 2016, silver will be over $200 and gold over $4000.
Pretty simple isn't it? You have pointed out that we have two factions at odds here. Those who trade to amass more fiat, and those who buy at the best price they can to preserve wealth. Both have fine points to offer for their positions, but they are not the same objectives. Pick a side and cheer the other side on. There is no benefit from each side berating the other.
Dollar bounce. Market sell off. End of QE2. Smart money exiting Silver. Relentless margin hikes to ward off speculators. Silver has topped short and medium term. Silver will go to $ 25.00 very quickly.
"Now, all of you know these changes are necessary for a very simple reason- silver is a scarce material. Our uses of silver are growing as our population and our economy grows. The hard fact is that silver consumption is now more than double new silver production each year. So in the face of this worldwide shortage of silver, and our rapidly growing need for coins, the only really prudent course was to reduce our dependence upon silver for making coins. If we had not done so, we would have risked chronic coin shortages in the very near future. Some have asked whether our silver coins will disappear. The answer is very definitely-no. Our present silver coins won't disappear and they won't even become rarities. We estimate that there are 12 billion -- I repeat more than 12 billion silver dimes and quarters and half dollars that are now outstanding. We will make another billion before we halt production. And they will be used side-by-side with our new coins. Since the life of a silver coin is about 25 years, we expect our traditional silver coins to be with us in large numbers for a long,long time. If anybody has any idea of hoarding our silver coins, let me say this. Treasury has a lot of silver on hand, and it can be, and it will be used to keep the price of silver in line with its value in our present silver coin. There will be no profit in holding them out of circulation for the value of their silver content. President Lyndon B. Johnson, July 23rd , 1965.
Did we miss something?
Silver dollar melt value = $28.42
Paper dollar value = $1.00
Silver dollar melt point = farenheit 1615
Paper dollar melt value = farenheit 451
Am I the only one who thinks it a tad irresponsible to allow someone to put down 5% and control a silver contract? Of course margin requirements should be higher. Maybe not the same as for stocks, but the existing levels were/are a joke and contribute to abnormal price movements in silver and all commodities.
Margin=debt and we know what that has done for us in the past 5 years.
Margin does not = debt when it refers to commodity contracts. Margin is only the skin you put up to guarantee that you'll hold up your end of the bargain. Same for buyers and sellers.
Funny all of this selling yet Kitco has NO silver rounds to sell to the U.S. I would think they would be awash with silver now everyone is panic selling. Hmmm...
And these super smart assholes are swapping silver for dollars? Rots of ruck. Actually paper silver. Actually paper silver they shorted. And what are they going to do with all their paper silver when there's no more phys? Swap it for dollars? And what are they going to do with their worthless dollars. Keep your eye on the DXY. Just don't get caught holding dollars no matter what. Any second now.
"normal correction" my ass.
Waiting for the possible 10am raid to load-up.
$2.68 an ounce since 1999.. stopped buying Silver Eagle boxes at $26 and change. No paper, ETF's, or Options. Same with Gold only Double Eagles (mostly St G's cause I get a boner from the artwork) at just over $300 each back in 1999. Guess what? $25 was a DREAM price for Silver since 1985 or so!! I do feel for those just now hit in this garbage manipulation, but being a Trader on the other side of Physical of metals, it is very understandable why this is going on. You guys need to let go of the idea of "fair". This is how Goovernments and UberRich are. They are not fair! That being said..IT CANT GO TO ZERO! If you have a Silver Dollar that is what it is! Same with denominated Gold. It's 20 Dollars..can't be less!! Go fix your Mustang and get drunk on the couch on Friday night's if you want, and when your ready to be in here for the duration with the grown ups then load up about half your planned funds during that quarter with Silver Eagles when the prices are near low 30's. Be aware it could still drop from there. If it goes to 20 or 15 or 10 or even 5 buy it again, in fact, bet the farm if you see 5 an ounce and can even find it for sale, because remember that the basis of the Fiat junk is in no way at all changed, the basics of ownership are still there. All those Trillions of paper(digital) have to find a home sometime, and it's not called Currency for nuthin guys! No flow..no value! 4000 years of value is what PM bring to the table. No piece of "money" paper has ever lasted even close to that long.
What makes you think there will be a farm to bet if the price goes to $5? This is what's so stupid about posts such as this -- they presume that there will actually be cash available for the sheep to purchase PMs (or whatevers) after they crash in value. I've got news for you: if you didn't sell when the price was higher (you were fully invested then, weren't you for the run to $100?), you probably don't have any cash available to "back up the truck".
That's one of the ways The Flock Owners shear The Sheep and slaughter them for a nice sis-ka-bob BBQ. It works every time. They've been doing it for centuries.
"INVESTORS"??????????????
Did I read that right? Investors. HA! gamblers is the proper word.
"i call him gamblor"
-Nice Homer reference.
I'll begin to raise my basis (in the high teens) when silver slips below $33, which actually could be early next week, and lever down as low as it goes. If silver manages to somehow fall out of favor completely and hits $20, I will sell almost everything I own to buy more, but I think the real bottom is right around where this article suggests - $27, my take - so figure it actually overshoots to around $25 before phase two of the binge begins.
The second phase of this secular bull will be more gradual, but also more painful for the shorts. If the government actually lasts until the 2012 elections, silver should be hitting all time highs over $100/ounce, regardless of the candidates, DXY, anything.
Think long term and you'll see what this really is - a short term, highly-controlled correction to save JPM's bad bacon. All the big banks and the US economy are totally fucked long term, so silver and gold will no doubt win big in the end.
If I was Cramer, I'd be shouting, BUY, BUY, BUY!
Agree. Only JPM's bacon will only be saved in the short term.
No shortage of 'paper' silver around. The de facto COMEX default has already occurred, since settling for 'cash' is a de facto default. Next up? The two silver price divergence will escalate. Paper price will fall as the physical price will rise. Tizz written in the tea leafs!
I always do buybacks at the resisitance points wherever I deem them to be. Everyone uses different methods, but the point is, this is nearing a buying opportunity.
It is NOT btfd. There is a difference here. This is not a dip, it is a full blown phase 1 wipeout (SME - good analysis). Which is good.
The silver pumping trolls get wiped out, the longs don``t care, the traders make a few bucks and lower their per ounce ownership costs and all is well and good.
I personally really like it when the self professed guru`s get crushed. (No dipshit trolls I am not one). Cause they are charletans. Nothing more.Every phase gets them.
Almost time to get your bus passes kiddies.
get ready to back er up!!!!
Let's get out the old checklist:
1) Fed printing dollars, my dollars becoming worthless by the minute. Check
2) No interest on the money in my bank account. Check
3) Cost of food, fuel, necessities of life all going up by the day. Check
4) Can't expand my business cause there's no more new customers, and customers I have are broke. Check
5) Stocks, investments, home value over last 10 years; big downer. Check
6) Buy 30 year bond? I'll be dead before maturity. Check
7) Can't off myself cause insurance policy won't pay for suicide. Check
** The only thing that hasn't lost value. The Au and Ag I bought 25 years ago! Thank God. BTFD !
Lmao, bout' spewed coffee all over the keyboard, thanks AIW.
I've been buying every two weeks... no problems. Didn't get to buy silver at >$45. I missed an excellent opportunity to buy into a panic and an emotionally charged leverage binge.
If you're deleveraging from the slave rag currency, just buy on a regular schedule like you would purchase toilet paper. Today I bought all-in (Shipping & Handling and the fee) for the same price as I bought it 4 weeks ago. It was a buy then. It's a buy now. Simple
"This first downside target already is in place and will most likely be taken out, which are the 50MA and the 38.2% Fibonacci retracement level, that come together around $39.
The next Fibo retracement targets -- 50% and 61.8% -- are at $35.4 and $32 respectively.
Then there's Bartel's that says we'll see $50 in the coming months again, and longer term $80. Guess we need to pick our technicians wisely.
The two possibilities are not mutually exclusive.
When demand outpaces supply, prices drop. yeah baby
+37.96... Good one.
Not sure how you can talk about charts or call end to a bull or some such when the most recent activity is entirely artificial. And it ignores the fact that large premiums are being paid by the manipulators for buyers to not take delivery.
I think on the chart it should note the price of silver as being spot plus and estimate of the premium thus accounting for the artificial manipulation.
It also doesn't account for teh near blow up of the COMEX, LBMA and JPM because of lack of silver or of silver backwardation.
The question should be asked what would the price of silver be if there was an end to market corruption aided by the CFTC?
It also ignores the fact that the run up in PMs in recent years has been in response to market fundamentals which if anything are deteriorating thus enhancing the case for PMs.
wait till August before the ding down becomes dong up... roller coaster all the way to nov. 2012...
In the end, the PM prices will correlate perfectly with the decline of the USD. The FED is only exacerbating the decline either out of arrogant hubris or the NWO agenda. Either way, westerners will have little say in the PM price. The Asians will be the determining factor; even the poorest among them have the ability to filter out the disinformation.
HKMEx starts trading May 18...they are plainly stating they will take on Comex....32oz gold contract to start with, others to follow.
THE BEATING CONTINUES!
Ha ha, I love Thunder Dome. Always shouting at people on the correction, and sucking his thumb on the surge.
Ha ha, I love Thunder Dome. Always shouting at people on the correction, and sucking his thumb on the surge.
Analyzing "downside targets" via maths and historical comparison, for a market that right now purely is driven by arbitrary intervention, seems kinda pointless to me. What exactly is your base for prediction, when you're dealing with agents, which can right now dictate prices at will?
As nice as it would be to know the bottom beforehand, this is all speculation based on nothingness. Prices wil only become predictable once it is based on supply and demand of physical.... either via a "second silver price", or by forcing proper accounting via delivery demands.... or as it is known otherwise: crash the comex.
I agree mostly. Calling a bottom is predicting the actions of manipulators. A chart shows where demand might overcome manipulation, depending on how blatant the powerz are willing to be. Many investors and traders will wait for a rebound before they resume buying. Physical buyers wanting to "load up the truck" will start before the rebound and need to pick a reentry point. Might get kinda expensive after you've crashed the comex!
I think there's going to be a critical point where longs feel they can reload and regain a huge net position and supply starts to seriously dry up. No one I know, not my plumber, hairdresser or CPA talks about silver...but when that happens, watch the fuck out!
If the long physical stackers get a little taste of QE-infinity, oh my oh my. So, like July-Aug. .
Bought my first Maples when spot was 6,78 USD, have been adding ever since and not sold a single ounce. Am buying even now, and will keep buying as long as FIAT paper keeps coming in.
I don't care about the "exchange rate", I care about the absolute amount of ounces I own.
This baby is just catching it's breath.
FUBM
Thank you for the rational perspective. I'm in the same mindset, my friend.... Buy silver, on a consistent basis, to build up on top of a core position.
Regardless of chat, opinion and math man, this manner of saving and aquiring works well over the years for me.
And keeps the Dollar cost average, low.
Silver has been an incredible blessing and I look forward to the coming years, buying on a regular basis, as the white metal cruises to new highs....and we have substantial positions holding physical.
Firefighter302
"Time, is on my side... Yes it is." Mick
Ahh! A kindred spirit. The paper bugs worry about how many depreciating FRNs they have and call US crazy?
I hope the PTB raise the margin requirment to 100% and beat silver down to the price of a Bernie Madoff IOU. All they are doing is pushing a beach ball underwater. I bought a whole shit load of silver at $22 and if it gets that low again I'll load up again.
By the way. Rare Earths are even better than gold/silver now by far plus platinum and palladium.
I'm want to see what happens to their beloved 'exchanges' when margin is raised to cash... which it eventually will.
Thank you Blythe and the masters of all who they survey!
Exactly what I was praying for, a nice price draw down so I can back up the truck one more time!
Thank you, thank you! Now to the cupboard to see if I can scare up some physical. Wait lists everywhere, with some outrageous premiums. Time to make the rounds of the pawn shops.
If the spot price for silver hits $28, we'll see how much physical silver is available. Then you'll know if the price of paper silver and physical silver has diverged.
well according to the silver bears, much maligned here, Danger & math, this should happen and the move back later on in end 2011.
That guy Ivars says PMs will hit the ceiling by end 2012, not before!
Guys holding physical are doing just that, holding. Guys juiced up on AGQ...well, who knows what they will do. Probably capitulate farther down.
However, the mining sector is about to start reporting earnings. As such, I think today is the day to BTFD on those. They seemed to stabilize yesterday...and lift in some cases. As they have lagged the bullion, they should make for a nice trade now.
In the end, I fail to see how the tightness in the physical market is fixed by the what has happened over the last week.
Back up the truck! Physical Silver is on sale!