With the recognized top in the US dollar, it appears clear that renewed bull markets have begun across the commodity sector. Copper, crude oil and even gold are showing rallies and breakouts that promise much higher prices in the months ahead. But what's the matter with silver?
First of all, you need to realize that the digital silver "market" is easily the most manipulated in the world. This is no longer some sort of "conspiracy theory." It is, instead, admitted and proven fact:
And by what means do The Banks manipulate price? They use their position as "market makers" to utterly dominate the digital derivative price. The relative concentration of this manipulative power in COMEX silver is displayed in the chart below from GoldChartsRUs:
But overt price manipulation cannot last forever. Simple laws of economics dictate this. And with prices of all commodities rising as the US dollar falls, pressure is building for a breakout in silver that will force the price manipulators to fall back to higher ground.
How will you know that this breakout has begun? The chart below lays it out quite clearly.
Since the bear markets ended in December of 2015, the dollar price of COMEX silver has—ON THIRTEEN SEPARATE OCCASIONS—closed above its 200-week moving average. Note that after each of these THIRTEEN events, the price was immediately set upon the following week and pushed back below this important, long-term trend indicator.
This is clear, deliberate and obvious price suppression designed to keep price contained. Could it continue for a while longer? Of course. Will it continue forever? No. Especially not with the falling dollar and rising commodities ratcheting up the pressure on The Banks to an intolerable level.
How will we know that The Banks are being forced to retreat? A simple higher high versus the $17.70 level of late January would be your first signal. After that, any weekly close above $18.50 will be a clear indicator that this latest price control effort—that has now extended for over 19 months—has failed.
Finally, where would one look to trade this latest dip in the hope of profiting from the next rally and possible breakout? Well, with the Commitment of Traders Report already showing The Specs to be "washed out," and with Commercial gross long positions now at an ALLTIME high, any further price decline from here should be limited. The chart below shows that any decline to near or below $16 should present a compelling opportunity for traders and stackers.
In summary, the US fiscal situation is dramatically worsening, and this is leading to a sharply falling dollar and failing confidence in the currency. These factors will eventually serve to spike interest in the commodity sector in a manner similar to 2010-2011. An eventual breakout for COMEX silver, through and above its 200-week moving average, will be your first signal that things are about to get interesting.