The Hardest Trades Are Often Right: Time To Buy Silver?

Tyler Durden's picture

Authored by Kevin Muir via The Macro Tourist,

Something is happening in China. Industrial commodities are plunging. It’s been a brutal week, and seems to be accelerating.

 

Too many traders underestimate China’s role in the global financial system. Often they are focused on Trump’s every word, yet they ignore big picture signals about China’s liquidity situation.

When China shows signs of tightening financial conditions, it is best to pay attention. And when their commodity markets begin trading limit down, it is time to think about lightening up on risk assets.

Right now, these sorts of warnings are falling on deaf ears. Stocks are soaring to new highs, bonds are selling off on economic optimism, and all seems great in the world. Yeah, I get it. I understand the factors driving investors to chase stocks.

But China’s tightening will eventually stall this rally, even in the United States.

In the meantime, I have been watching the silver market get beaten like a rented mule. The past few weeks have been ugly.

http://themacrotourist.com/images/2017/05/SilverMay0417.png

Almost every day has seen a lower close. As a long term precious metals bull, it has been difficult for me to sit on my hands and not buy with both fists.

But what has kept me on the sidelines was the knowledge that speculators have had their largest net long position in history.

http://themacrotourist.com/images/2017/05/SpecMay0417.png

This record large spec position could not have been put on at a worse time. China’s credit tightening has crushed industrial metals, and silver has been dragged lower.

In the process, the gold/silver ratio has spiked higher in one of the largest moves over the past few years.

http://themacrotourist.com/images/2017/05/GoldSilverMay0417.png

There is no way the specs have held on during this carnage. Next week’s CFTC report will see a dramatic fall in the net long position in silver.

The real question is whether it is time to buy. I have been waiting like William Wallace with the English rushing at him on horseback, trying to hold on until the last moment to raise my spear. It’s been difficult, and the ferocity of the selling has me petrified.

But the hardest trades are often right ones. I am not sure if it is brave or stupid (and probably a bit of both), but I am going to be buying silver down here. I hope I suffer a better fate than good old Billy Wallace…

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
JRobby's picture

When CB's are most fearful, metals will be most supressed by their manipulations.

CB's seem frightened?

Creepy_Azz_Crackaah's picture

I've been told that it's time for seven years...

_ConanTheLibertarian_'s picture

Well maybe because it has been correct for 7 years?

BullyDog's picture

Well if Le Pen wins on sunday I'll push those winnings into silver, do love the shiny.

beemasters's picture

Central Banks will have no choice but to return to gold standard, thus helping silver price as well. If not, cryptocurrencies will ensure their downfall. At the moment, both fiats and cypto's are backed by practically nothing but faith.

HockeyFool's picture

Dollars are backed by a whole lot of guns. Nukes too. Shitcoins? No so much.

J S Bach's picture

The idea of "buying" silver or gold is a bit perplexing to me.  I mean, would you state "It's time to buy $100 bills."?  No.  Why?  Because it's the "money" (or more correctly "currency") itself.

I look at PMs as REAL money.  Thus, it has that fuzzy concept in my mind.  Maybe I prefer the phrase, "It's time to OWN silver."  (Just as you OWN the paper currency in your wallet.)  Or, "It's time to exchange that paper for silver".  Yeah, that's more like it.

GubbermintWorker's picture

But you don't own the currency in your wallet. Whatever issuing Government does. Not so with gold and silver.

new game's picture

loooooking back a tad moar than the chart above, 16 is a floor or ceiling. depends on what the manipulors of paper silver are happy with(shorts). then back up we go....

soooooo, glad i got out around 30....

and rolled to leeeeeeeeeeead.

caseloads awaiting trade barter or use.

i draw down inventory every so often;)

 

Whalley World's picture

Gold is great but silver is scarce and precious, I may just add to my bloated stack, one day all this will pass and those with real money will protect their Asset Asses 

JRobby's picture

And the financial and monetary system has been a fraud for at least 8 now.

crazytechnician's picture

The monetary system has been fraudulent since before shells were used as money. That is it's job. It's always been a game and always will be. Question is are you a player or are you being played ?

HooRAY4rSIDE's picture

The monetary system had been fraudulent since even before Jesus (in his only recorded fit of rage) turned over the jew moneychanger tables in front of the temple.

 

So naturally, what did the jews do? Well ~ the law was that one prisoner was to be let free during the holy festivities of Passover.

 

Naturally, they chose to set the murderer Barabbas free and have the Romans crucify Jesus.

crazytechnician's picture

I just don't buy any of this anti - Jew / Zio shit any longer. It's just plain fucking mundane and boring listening to retards on this subject. All humans are fucking greedy regardless of race creed colour whatever it's in all of our genetic makeup. It's called fucking Survival. Even Mother Therasa took the food out of poor people's mouths by eating it herself. Just being alive makes you greedy.

roisaber's picture

It's about in-group out-group social signalling you nonce. Jews signal as in-group to everyone and everyone falls it, all the while jews spread out-group signalling amongst everyone else so nobody trusts anything but the jew. This is why they get kicked out of everywhere for their entire history - the one thing everyone in the world has agreed on!

crazytechnician's picture

Have you just come off your meds ? WTF does that actually mean ? in-group-out-group signal sound like a major fucking circle-jackoff to me..

roisaber's picture

All I heard from you was "I have never read a book on social psychology and I don't ever intend to either." Kill yourself.

crazytechnician's picture

"I have never read a book on social psychology and I don't ever intend to either"

Alert. We have a real smart one here. Apparently somebody never read her book that means they should go kill themself.

Sounds like another brainless moron to me. I would never advise somebody to go kill themself.

However , if you have the inclination , be my guest. One less fool on the planet.

roisaber's picture

You are obviously a shill, you've got far more posts than anybody else in this OP, and anyone on Zero Hedge who's smarter than you (ie: everyone) will see through your jewish charade and have a point and a laugh. I've been fighting the JIDF online for more than a decade. You are not better at this than me, fucko.

crazytechnician's picture

Sorry but I don't know what the the JIDF is. Is that some kind of anti-jewish hate group you are part of ? Sorry to inform you but I don't buy into your hatred that you thrive on. You should go play with your favourite dildo I can assure you will have much more fun sticking that up your arse than hating people all day long.

waterwitch's picture

Shells as money? Sure: 22LR, .308, .38 mag, .223, ...

Whalley World's picture

8 years, it was a sham when the NASDAQ fell in 2001, it's only gotten worse but was rigged way back then.

GreatUncle's picture

Fraud for a long time before 8, they just been found out for 8 now.

Needing to create so much fraud to support the system without an economy of size to hide or support it.

If an economy is $100 printing another $200 is noticeable ...

giovanni_f's picture

I've been told there is a silver shortage for more than 10 years now. Maybe it takes the closure of some base metal produrcers taht feed the streams to Randy Smallwood's Silver Wheaton before that happens - if ever.

crazytechnician's picture

There never has been and never will be a silver shortage. That is Fake News.

oddjob's picture

A dollar shortage is fake news.

HooRAY4rSIDE's picture

Fake news is fake news... I think I saw that on CNN, which is fake news...

crazytechnician's picture

I advised you oddbod to buy bitcoin at 300 bucks you called me an idiot so you can fuck off.

Doubleguns's picture

Silver for sale cheap this summer. THATS the time to buy. 

crazytechnician's picture

Been hearing that shit for years.

It's fucking cheap because it's fucking useless.

oddjob's picture

If I did, I still stand by that statement x 10. I don't own a smartphone, so naturally I am precluded from turning my wallet into a slot machine.

crazytechnician's picture

"I don't own a smartphone"

Congratulations.

Sounds like you don't own a fucking brain either,

oddjob's picture

Says the chump endlessly pumping 1 of near 250 available crypto currencies.

logicalman's picture

S - surveillance

M - marketed

A - as

R - revolutionary

T - technology

oddjob is lacking in smartphone, you appear to be lacking in smart.

 

crazytechnician's picture

You and your gimp boyfriend oddbod seem to be lacking in bitcoin as well. No worries. If you give each other a blowjob that will make up for your bitcoin losses.

logicalman's picture

Your crazed ramblings and childish insults give away the fact that you are severerly lacking in intelligence and the ability to form a reasoned argument.

Must be hard to go through life with a room temperature IQ.

 

crazytechnician's picture

Not that I am really that interested , but who plays 'male', and who plays 'female' in your relationship ?

Longarm's picture

Fag boys always bring their homo crap into the discussion.

crazytechnician's picture

Agreed , they need to contantly 'back' each other up.

frank further's picture

Does ZH have a way for a petition to have adolescent, foulmouthed, stupid hatemongers banned?

auricle's picture

This is a short term oversold buy the dip sell the 32 and 50 percent retracement rip. Need to wait for the impulsive rip. The buy and hold sold by the contrarians has been the misfortune of many. 

Raffie's picture

Get it while u can.

Convert your gold for silver since the ratio is off.

crazytechnician's picture

Correction: Convert your gold and silver for bitcoin since the ratio is way off.

Agstacker's picture

You must have read this article-

 

http://www.zerohedge.com/news/2017-05-03/worlds-largest-bitcoin-exchange...

 

and are trying to dump your bitcoin, correct?

 

 

Raffie's picture

I sold all my Btc today when it hit 1620.

I will BTFD then continue to hold.

Dropped $100 in 1hr and floppin around a bit.

STAND BY TO BE AMAZED

Fester's picture

The CFTC report is fake. 

 

Fake news.  The ONLY thing that will release PM's is when they are down to their last ounce.

 

Patience

JRobby's picture

Yup, elite have been going into metals, RE and priceless art, jewels & collectibles for some time now.

"What about STAWKS!!!???? (Laugh Track Deafening !!!!)

ArthurDaley-OldieTimeTrader's picture

"In the meantime, I have been watching the silver market get beaten like a rented mule."

 

At least someone understands how I and my brother and sister donkeys are feeling!

Bigly's picture

When Kyle speaks, EFHutton listens

UTICA CLUB XX PURE's picture

Let me know when it gets back to $30/OZ so I can break even...