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Silver's Four Hour Slamdown Window

Tyler Durden's picture




 

As silver suffers its biggest one-day drop of the year, following a February of strange 'spikey' behavior, we thought it might be useful to show just what has been going on for the last few weeks. It appears that from the open of US equity trading pre-market to the close of Europe's equity markets (~0730ET to ~1130ET), Silver has been offered non-stop. Out of that four-hour window, on average, Silver has not moved in the month of February. With the dramatic nature of physical demand at the Mint, this serial slam-down of Silver just seems a little too premeditated and predictable.

 

February has seen more than its fair share of price drops...

 

but they appear to be strangely collected in a brief four hour window at the start of the day... the black line is the average of the day's performance in February across the dates selected.

 

Charts: Bloomberg

 

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Tue, 02/19/2013 - 15:50 | 3257091 Captain Benny
Captain Benny's picture

I quit my long time job a couple years ago in part to close out the 401k which I couldn't cash out while working there.  Never looked back.

Tue, 02/19/2013 - 14:34 | 3256796 JLee2027
JLee2027's picture

You've still got a 401K ? What happens when the financial reset wipes out all electronic money?

Tue, 02/19/2013 - 14:36 | 3256805 Meat Hammer
Meat Hammer's picture

My company matches, so it's free money for now...until it's not.

Tue, 02/19/2013 - 15:03 | 3256912 Tortuga
Tortuga's picture

ah yes, "free money". Does it come with a facebook tax exemption or something?

Tue, 02/19/2013 - 14:23 | 3256746 Venerability
Venerability's picture

Once again, very dangerous situation FOR the Alpha Bank, with the Alpha Bank as CDE's advisor on the Orko acquisition, at the same time JPM and its closely-knit nexus of funds out of London have held pretty much all of CDE's Short position - albeit no longer  large.

Still, this has the earmarks of a major scandal if some regulator or another wants to pursue it.

I therefore still maintain that JPM NEEDS a nice recovery in both Silver and the Silver stocks, coincident, perhaps, with PAAS and CDE earnings on Thursday. Maybe the analysts have at long last done accurate predictions, so the two major Silver stocks contrive to at least meet, with Bullish outlooks going forward.

If as JPM goes, so goes the Market, everyone has a stake in the entire Silver mess being taken care of once and for all.

The Propaganda re both Silver and Gold is now so wrenched and - let us face it - idiotic in the extreme, it's hurting the manipulators along with everyone else.

Only a very few jokesters like a Market based on a joke. Most do not. Overwhelmingly do not.

Tue, 02/19/2013 - 14:35 | 3256804 Al Huxley
Al Huxley's picture

Too bad there are no regulators in the market.

Tue, 02/19/2013 - 15:11 | 3256930 atomic180
atomic180's picture

they are aware they just chose too look away...

Tue, 02/19/2013 - 14:50 | 3256860 atomic180
atomic180's picture

It seems a lawless landscape they survey...

Tue, 02/19/2013 - 15:00 | 3256906 Tortuga
Tortuga's picture

Equivication sucks.

Tue, 02/19/2013 - 15:26 | 3256983 They Tried to S...
They Tried to Steal My Gold's picture

If they are short why does JP Morgan need a Silver recovery?

Tue, 02/19/2013 - 16:01 | 3257137 Venerability
Venerability's picture

They would have covered their Monster That Ate World Markets Silver Short position years ago, if they were actually able to, IMO.

Now, with PM trading decisively moving to Asia - forever! - they truly do want to get it simply erased one way or another, as do HSBC and especially Commerzbank, inheritor of the dastardly Dresdner Short.

The Monster Silver Short has been the bane of world markets way too long.

If we are actually going to see better times ahead, with some major compromises between "North and South" - and "West and East" - it is in literally everyone's best interests to eliminate one of the major obstacles to reining in Pinball Markets with very little correlation to Reality.

Yes, I know some of you Fellas still THINK you benefit from Pinball Markets.

But you DON'T, anymore than anyone else does.

Not even JPM does. 

Tue, 02/19/2013 - 14:26 | 3256753 Goldenballs
Goldenballs's picture

Of course Silver is all bollocks,sell it all .............

 

 

What you can expect in 2013.

For starters, silver prices are going to skyrocket. And early investors preparing now for the coming surge could reap an absolute fortune.

I don't say that lightly, either.

The truth is, at our current rate of consumption, we'll completely run out of silver within the next eight years.

And it's guaranteed to send prices in excess of $150 an ounce — very soon!

A few of the factors at play include:

  • Obama's second term and the coming 2013 fiscal cliff, when taxpayers will face an extra $500 billion in tax hikes.
  • Central banks are starting to load their safes with physical precious metals, both silver and gold.
  • Sales of silver are drastically outpacing sales of gold, in both private and institutional holdings, leading to a much more rapid surge in spot prices.
  • And to top it off, silver mining companies across the globe have been struggling to find enough silver to meet the industrial demand side of the equation.

Oh yeah.I,ll take my chances and keep stackin.  :) :) :)

Tue, 02/19/2013 - 14:44 | 3256838 philosophers bone
philosophers bone's picture

Don't get emotional about the moves, this is nothing.  We are likely to see very violent moves both up and down that is going to make these 2% moves feel like a kiddie coaster.  The key is to not leverage so that if it gets slammed, you don't have to sell.  As long as we can wait it out, it is almost certain that PMs will go much higher, which cannot be said about any other investment.

Tue, 02/19/2013 - 16:07 | 3257172 DebtSlaveZombie
DebtSlaveZombie's picture

I could also say don't get emotional about Silver.  Don't buy just because it dips.  Don't assume anything.  It's being dumped.... What market factors exist for it to move higher?  Anything?  Financial collapse?  Collapsing dollar? It's all speculation.  How much capital are you gonna tie up in an investment hoping for hyperinflation or an economic collapse?  Sure, it may happen.  But what if it's 30 years from now.  Do you realize the Fed has endless tools and moves it could make to strengthen the dollar and the markets without inflation coming into play?  Unemployment and underemployment are higher and higher every month.  We can't "off the chain" growth if companies arent hiring.  And even if there is a financial collapse....do you have any idea how levered these hedge funds are?  With margin calls comes selling.  And when selling starts....everything gets dumped, even PM.  So, the dollar will reign.  But for how long?  Speculation.  It's all speculation.  Silver has been in a downtrend since May of 2011.  It will revisit 20.  No matter how many times you "stack em"..... You'll be stackin' and cryin' at 20 as well.....

Tue, 02/19/2013 - 16:14 | 3257211 jmcadg
jmcadg's picture

Just wondering, do you think the PIGS will accept their plight for 30 years?

Tue, 02/19/2013 - 16:21 | 3257239 jomama
jomama's picture

and yet, it's the safest investment i can make.

Tue, 02/19/2013 - 14:45 | 3256842 MFLTucson
MFLTucson's picture

Want JP Morgan ruined, this group is the shit of the earth!

Tue, 02/19/2013 - 14:53 | 3256874 atomic180
atomic180's picture

When you respect  no laws...you should expect no respect...

Tue, 02/19/2013 - 15:12 | 3256936 dcj98gst
dcj98gst's picture

When this comes unglued.  They will be hanged.  There will be no place on earth for them to hide.  Along with a lot of the bankers will probably loose thier heads.

Tue, 02/19/2013 - 14:53 | 3256875 FLHRS
FLHRS's picture

Deflation might be more of a problem then you think.

Tue, 02/19/2013 - 14:56 | 3256886 philosophers bone
philosophers bone's picture

These 2% daily moves are child's play compared to what's coming.  There will likely be very violent moves, both ways.  Train to be emotionally under control and it starts with realizing that these 2% moves are completely irrelevant. 

Tue, 02/19/2013 - 15:03 | 3256913 slightlyskeptical
slightlyskeptical's picture

If you take a loan from the 401K you will be unable to contribute until that loan is paid back. So if you get a match you lose that immediately. You will also have to start repaying the loan through payroll deduction immediately.  You need to be more right than any investor in history for it to work out for you in my opinion.

Tue, 02/19/2013 - 15:29 | 3257002 atomic180
atomic180's picture

 My 401k is in PM's so the FED is losing 20% along with me... small consolation...

Tue, 02/19/2013 - 15:26 | 3256986 mayhem_korner
mayhem_korner's picture

 

 

Any correlation between the paper slam-down and the fact that the pantry is empty?  The Short Boys are simply shaking some coin loose from weak hands so that they can remove the "Out of Stock" signs from their windows.  Anyone who doesn't see that isn't paying close enough attention.

Tue, 02/19/2013 - 15:38 | 3257044 JohnGaltsChild
JohnGaltsChild's picture

Blythe's been busy.

Tue, 02/19/2013 - 15:41 | 3257056 JohnGaltsChild
JohnGaltsChild's picture

Quite insane. Spot's going to 29, but you can't do better than 37 on eBay. Does JP own eBay?

Tue, 02/19/2013 - 16:39 | 3257304 Swarmee
Swarmee's picture

No, but eBay owns PayPal. Factor in listing fee, final price fee, any extra fees for listing upgrades such as extra photos, bold text in listing title, featured listings, etc. Then add in the PayPal tx fee, and hey did the buyer use a CC? Great, there's another 3-4% passed on to the seller.

By the time the fees are through it can be 20% of the final price for items under $50 such as non-graded ASEs. That's about the delta between eBay spread and PM dealer spread.

eBay is the movie theater candy counter, people pay a premium for the convenience of not planning ahead. If you're posting on ZH you're probably already a few steps ahead of eBay buys.

Tue, 02/19/2013 - 17:12 | 3257423 fuu
fuu's picture

Actually for quite a while it was possible to buy silver under spot including shipping out of ebay. It was also possible to buy large lots of mixed junk silver, pick out the good ones for resale, leaving the remainder for stacking cheap.

I had a buddy put himself through college that way.

Admittedly that stopped being possible late 2011.

Tue, 02/19/2013 - 17:30 | 3257469 Al Huxley
Al Huxley's picture

Look around, you shouldn't pay more than 7% premium for silver bullion.  Don't buy on EBay (Although apparently it's the right place in the event you want to sell...)

Tue, 02/19/2013 - 15:48 | 3257082 DebtSlaveZombie
DebtSlaveZombie's picture

I agree MDB.  What's worth mentioning is the size of the silver market.  It's very small.  Therfore can be easily beat down at will.  Sure, when it moves it may crush those that are short or may make a few of us rich due to the size of the moves, but overall its a commodity play just like everything else.  And when stocks are performing, no matter what we think about the Fed's involvement in the markets and all the liquidity being injected around the world, we can't fight the truth.  Silver is dead right now.  Loose money is flying into equities not PM.  It's not going to be a mover for a few years, mainly because as long as Obama and Co. are still around, it's gonna rain money and an economic collapse will not happen.  Now, in 10 years will silver and gold double from here?  Probably.  But who wants to hold onto dead investments waiting around for the "financial collapse".  Even then, margin calls will crush physical metals markets.  The real entry point is where all this started...somewhere around 17 to 19 bucks an ounce.  Maybe lower.  All liquid is pouring into equity markets and will crush silver as managers chase this thing to DOW 15,000....maybe 16,000.  This will go much lower before it goes much higher.  But, hold your physical... and watch it plunge.  Then "back up the truck" and buy more.   PM investors are the only people I know that actually want their investments to go LOWER so they can buy more.  I mean.... wtf?  Oh well... I guess you'll get your chance.

Tue, 02/19/2013 - 17:39 | 3257504 philosophers bone
philosophers bone's picture

The problem is we have been trained to "trade" to try to guess the next market move for the upcoming quarter / month / weekend.  My investment horizon is a minimum of ten years, even longer.  I have to laugh at stock brokers who talk about their "long term" investment horizon and start talking about 18 - 24 months out!!

Tue, 02/19/2013 - 18:28 | 3257641 James
James's picture

Debt Slave said-Now, in 10 years will silver and gold double from here?  Probably. 

I submit that is 10% per year return on my cash-I'll take it!

Tue, 02/19/2013 - 16:21 | 3257235 Dr. Sandi
Dr. Sandi's picture

Perhaps the price of Comex paper silver is finally reaching its ultimate destination of zero.

As for me, I'm holding on to the Real Thing instead. It has a value far greater than paper or dugutized electrons.

Tue, 02/19/2013 - 16:54 | 3257374 Quinvarius
Quinvarius's picture

Last month the base money supply increased by as much money as existed in 1980.  You'd have to be pretty simple to think any selling in paper PMs is going to make a difference in teh end.

Tue, 02/19/2013 - 17:02 | 3257402 css1971
css1971's picture

The gold/silver ratio doesn't match the S&P... Silver is an industrial metal if the S&P was where it should be then silver should be higher through demand.

Either S&P falls to ~1200 or the gold/silver ratio goes to ~40. Copper and aluminium say the S&P drops.

 

Tue, 02/19/2013 - 17:10 | 3257421 Kirk2NCC1701
Kirk2NCC1701's picture

IMO, the explanation that Fund mgrs are selling PM's to cover stock losses only goes so far, given that their holdings of PM's are so thin or non-existent to begin with.  I mean, how much exposure will a Fund mgr have to PM, if he/she is the high-tech stock type? 

I sense that Sovereign players are at work here:  the Fed, BOJ, BOC, and the non-goy-BOI.  As a 'motive' in any crime scene, The Fed only wants to keep a "lid" on PM's, and does not need to kill it.  But the other three (BOC, BOJ, BOI)... they very much have an interest to beat down the price of paper-PM, so they can trade it in for for hard bullion (front-run the stampede) before the End-game really gets going.  At some point, the BOC buy volumes of bullion might even cause the stampede, when the supply dries up.  The bonus is that the mine stock will also be even more dirt-cheap by then. 

Could be the start of the sovereign front-run for bullion vs. paper.  Ironically, although the CB's are our natural enemies and enemies of free markets, they are acting as our 'friends' in the short-term, since they enable us to buy bullion cheaply.  Looks to me like Paper Assets --> Hard Asset swap underway everywhere, not just with ZH nickel & dime BTFD buys.

Tue, 02/19/2013 - 17:41 | 3257511 Chicagomark
Chicagomark's picture

I don't worry about the silver price drops if they are not accompanied by a corresponding drop in crude oil. No way gold and silver can stay down for long with high oil prices.

Tue, 02/19/2013 - 17:52 | 3257539 KingdomKum
KingdomKum's picture

we few,  we happy few,  we band of silver holders  .  .  .  

Tue, 02/19/2013 - 18:00 | 3257559 roadhazard
roadhazard's picture

I read somewhere a month or so ago that there was a ruling that allows silver to be legally manipulated. I knew there was a crash coming when I read it. "Duck yer head Mr. Custer."

Tue, 02/19/2013 - 18:12 | 3257597 SilverMaples
SilverMaples's picture

These slams show desperation on their part as they clearly just keep increasing in frequency. This indicates that they are not happy with the current result and so expect more of them and at different hours, until physical margin call or market crash. There is no incentive for the kids to stop playing with matches until the house burns down.

Tue, 02/19/2013 - 18:44 | 3257674 e_goldstein
e_goldstein's picture

Desperate, yes.

Different time frames, I don't know. Looks like the sell-monkey/bot starts around 7:45 and then breaks for lunch and a dip in Blythe's icy slime hole until the end of the day.

Tue, 02/19/2013 - 18:19 | 3257620 Herdee
Herdee's picture

The Israeli response to Iran going ahead with another step in their nuclear program is still very real and should still be taken very seriously in any silver or gold trade.Patience is running thin.If that type of "risk event" happens,the short sellers are going to take a considerable beating.

Tue, 02/19/2013 - 20:06 | 3257845 DeficitAlchemist
Tue, 02/19/2013 - 20:43 | 3257916 robertocarlos
robertocarlos's picture

When nobody doesn't want something then the price goes down until somebody buys it. :)

Tue, 02/19/2013 - 20:45 | 3257920 Grimviewer
Grimviewer's picture

The future is not predictable.Listening to permabear ranting and you miss out on equity gains eventhough pump primed by QE.Instead of misguided faith in one asset class like P.M.'s,Bonds equities or whatever just do what Harry Browne did 25% allocations to gold,longterm bonds cash and equities annual rebalancing,all bases covered for an inflationary/deflationary/disinflationary/growth future.P'M's yield fuck all at the end of the day and buying thinking that the day of reckoning is around the corner is daft bollox.Soros and co have dumped partial gold positions,they probably still hold some but see better opps shorting yen.Diversified strategies mitigate risk.

Tue, 02/19/2013 - 22:01 | 3258115 TahoeBilly2012
TahoeBilly2012's picture

I just read the Wiki on bitcoin. Lotsa information, highly technical stuff, no mention or what is "backed by" or "redeemable for". Alas, it is nothing but a "viral novelty" it would seem that backs it. It may just hold it's value of increase due to this fact. Most likely like most Net based trends, it will eventually fade away and become worthless. Oh sure, it doesn't have "QE feature" and there is no "fairy gold horde" missing behind it, so at least it is straight up in that sense. In the end, it's a highly technical fad and does nothing for the sound monmey movement unless it wakes people up to think a bit harder.

I say a silver backed currency online is the gig, where you can redeem for phys in many locations, that sort of thing.

Tue, 02/19/2013 - 22:08 | 3258138 plata pura
plata pura's picture

thee have yet to see jirationing in precious metal including gold, platinum and palladium exchange pricing. for the proper precious aka silver 25% paper swings coming. then when belligerent nations nationalize their digs........................

Wed, 02/20/2013 - 00:41 | 3258498 Tompooz
Tompooz's picture

Can anybody explain this? I follow the daily graph on goldprice.org. Yesterday at, or just before the NY time of 18:00 it showed a flash crash down to 1585. This morning, the flash crash spike had been removed, but the graph still showed a ten minute "no price" gap.

Thu, 02/21/2013 - 08:00 | 3262593 Non Passaran
Non Passaran's picture

I've see that too.
Sometimes it just happens. If you actually transacted at that price that would have been "provable".

Wed, 02/20/2013 - 01:05 | 3258529 ich1baN
ich1baN's picture

THat is essentially the correct analogy. Artificially suppressing the price of silver and gold is like holding a person under water that doesn't have sufficient air in his lungs. 

Eventually that person fights his way to oxygen with intensity seeking a stable enviornoment. Gold and Silver will eventually burst forward by mid to late March as the debt ceiling and sequestration negotians begin to take headlines again. Remember what it did to gold prices in 2011 ? Something tells me $1850 that all Bank analysts are predicting by year end 2013 is not too far off.

To the poster above about the distribution phase. You are excactly right, they have held gold and silver in the distribution phase longer than anyone anticipated. Keep in mind, the longer the base, the stronger the price move higher. 

Manipulations are not bigger than markets in the short term. Markets are bigger than governments and manipulations. Keep that in mind.

Wed, 02/20/2013 - 05:09 | 3258722 AgentScruffy
AgentScruffy's picture

It's wise to continue to be very bullish on gold and silver. I think this is one of the most important articles you can read for 2013: "Gold and Silver Futures Markets Heading for Crisis" http://www.goldmoney.com/gold-research/alasdair-macleod/gold-futures-mar...

Wed, 02/20/2013 - 07:32 | 3258787 SilverMoneyBags
SilverMoneyBags's picture

Its really funny to me the perspective of people. Everyone screaming about hyperinflation but what they missed was a 40 year inflation bubble. Everyone screaming about metals and its a 13 year bubble.

Wed, 02/20/2013 - 12:06 | 3259598 El Diablo Rojo
El Diablo Rojo's picture

I bought my last 3 shippments from nwtmint.com They charge just over spot. The down side is an 8 week delivery.

Wed, 02/20/2013 - 12:33 | 3259747 El Diablo Rojo
El Diablo Rojo's picture

I bought my last 3 shippments from nwtmint.com They charge just over spot. The down side is an 8 week delivery.

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