Silver's price action has been curious, as it started to drop suddenly right at the beginning of February. Lost 5% in a day, in fact.
Gold took a little bit longer to move, and notably dumped on a much smaller magnitude.
I have an open call from mid-January that gold is likely to correct, and it appears to be coming to fruition:
Gold GC1 - Discard Greed, Enjoy the Tranquility of Rationality
The thesis being that the Nasdaq and tech will moon...
Nasdaq NQ QQQ - Reality Will Be a Tough Pill for Permabears
And as it does, metals will dump, and once the stock market is exhausted then the pump cycle will rotate back into metals, and things will really go.
All that being said, I believe that based on Silver's price action that it's dumped for the purpose of short trapping and liquidating longs and is about to make another move up before silver really starts to head down.
A warning on China
Since January 10, the Chinese Communist Party has claimed that there has been 0.00 new Wuhan Pneumonia/COVID-19 cases. This comes after news that the country was absolutely sacked by the pandemic after Xi Jinping threw away the disastrous COVID-Zero social credit lockdown blunder. The after effects were so significant that countries like South Korea were suddenly blanketed in difficult-to-explain smog, which may very well have come from mainland cremation furnaces being on full blast.
What this tells you is that at any moment, any bullish impulse in markets-at-large can be interrupted by big time pandemic problems, up to and including the USSR-style fall of the CCP. So you have to be careful, and you have to be prepared.
Mainstream media is not going to alert you that there's any problems with their darling erstwhile model of the world they want to create: the Chinese Communist Party. They'll leave you ignorant until the disaster is sprung on you like a cantilever and you'll be the one who suffers the regrets.
If you have heavy long positions you should really hedge with 60+ day 10% OTM puts on the indexes/index ETFs.
The call
To understand silver, we have to look at the long term price action.
Monthly
We're dealing with a _very_ wide dealing range between $30 and $12~. '22's low of the year was only $17.50, and any very very bearish scenario below that could see as low as $13.
I have reservations that we see $13. I think that in reality a bear impulse on silver might only go as low as $15, and not for very long.
On weekly bars, the present situation is more obvious.
Weekly
We're dealing with a 10+% pullback with both a trendline and the $25 algorithmic/psychological operation figure that went untouched. Not only did $25 go untouched, but they set a double top there before the curiously-timed dump that gold did not follow.
Thus, I believe that what the market makers have set up to do is to raid the $25.50 level, perhaps in the period around Tuesday's CPI and into the end of February, before silver retreats back towards $18.
The iShares Silver Trust SLV likewise set a double top, failing to raid the previous daily high by 2 cents.
All the stars are aligning, so to speak, and makes a fine trade long over $25 in anticipation of a Lyft-style fakey trendline breakout:
LYFT - Buy the Dip, Ride the Lift
$22 --> $25.5 is close enough to 15% and in a time horizon that should manifest before February is out.
This play will also knock out a ton of short sellers, while bringing in a lot of momentum traders who like to buy highs.
The MMs may also use this to drag in the fools who think that the USD is done and that their bullion will reign supreme, despite us living in an era when every central bank wants to install its own digital currency and its own CCP-style social credit system.
And thus, if this pump does manifest, you have to mind your greed. Over $25 is a sell and you want to see big manipulation to the downside, because when this Party is very close to being finished, $50+ silver is legitimately coming.
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Silver chopping around at $22 is interesting. More interesting will be to see if metals go up if CPI comes in hot tomorrow on the new calculations that only include data from 2021.
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At this point if the trade is to come true I suppose the target dump area is $20.5.
All that algo capping at $22.00 should be a tell that it's not truly bear town time yet though.
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Well, $20.5 was indeed the London session dump.
Let's see if she can go.
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$22 was a key level for silver.
Looks like metals are both going to go.
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Btw, $25 silver looks like it's totally incoming.
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This one took a very long time but has finally achieved $25.
I think the MM's bias is to the short side and not to the long side though.
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This trade's achieved all its objectives. $25.5 is a sweep of a psychological level, especially after going straight up.
Metal bulls should be cautious. Are we really going back to HKEX:30 under the current conditions?
I do think it's going to $30. In fact I think it could go much higher than that...Between somewhat robust industrial applications in EV and tech, the current dynamic with the Fed, and and a general atmosphere of uncertainty, I see far more tailwinds than anything else. The Fed piece being the biggest driver of course. I think it's pretty clear that the Fed is being forced into a premature pivot despite inflation still north of 5%. It spells doom for the dollar. Don't ask me though, I'm just relaying what the bond yield curve has been screaming. That somewhere between 3 months, and 2 years from now (which I view as short to med term), short term rates are coming down more than 1%. We're in / headed into further stagflation...buy gold / silver. Better yet options on miners (DYOR)
LordWrymouth
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@Alt-B, I actually think Silver will go to $50 and Gold will really run. I just think it doesn't make sense for metals to go hard in Q2 '23.
Alt-B
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I agree. Silver to $50 (we’ll see about higher than that) and gold to +- 3k. I’ve been extra long miners trying to ride this up. My concern is a 1:1 risk asset correlation dump so I’m building a short equity index position into this current rally slowly as hedge for that.