• "Spreading the ideas of freedom loving people on matters regarding high finance, politics, constructionist Constitution, and mental masturbation of all types"

Silver

Strawboss

Home Improvement Sales Trainee...
Site Mgr
Site Supporter
Joined
Mar 31, 2010
Messages
6,991
Likes
12,590
For comparison - here is another silver COT chart that shows what it looked like as the rally began in 2016. Notice how the large specs increase their positions into a price rally...and how the commercials increase their short position into price rallies. At major tops/bottoms - you see the large specs on the wrong side and the commercials on the right side of what is coming next...

It was super bullish then...which makes the current set up even MORE bullish. As an aside...the commercials have NEVER been net long in silver. NEVER. Another week of large spec selling would push the commercials into a long net position as they are the other side of the trade.

Timing of this? That's always the conundrum... My best guess is that its imminent...next week? 2 weeks? A month? Hard to imagine it being longer than that. What would be even better would be if price actually fell first into the $15s on a sharp spike down to grab all the sell stops down there.


silver cot 2016.png
 

savvydon

Gold Member
Gold Chaser
Joined
Dec 14, 2010
Messages
3,304
Likes
3,057
Good time to utilize some dry powder. Agree that any sharp spike down into the 15s with a resultant GSR moving toward to 85 range could be a good time to back up the truck. 2c
 

Strawboss

Home Improvement Sales Trainee...
Site Mgr
Site Supporter
Joined
Mar 31, 2010
Messages
6,991
Likes
12,590
Here is a look at the GSR (gold:silver ratio). There is a rising wedge completing which is a good indication of an upcoming change in trend.

GSR 1.png
 

Strawboss

Home Improvement Sales Trainee...
Site Mgr
Site Supporter
Joined
Mar 31, 2010
Messages
6,991
Likes
12,590
Here is a chart of the miners bullish percent index...steadily grinding higher...

BPI.png
 

Weatherman

In GIM since 2006
Gold Chaser
Site Supporter ++
Joined
Mar 30, 2010
Messages
2,974
Likes
3,751

Strawboss

Home Improvement Sales Trainee...
Site Mgr
Site Supporter
Joined
Mar 31, 2010
Messages
6,991
Likes
12,590
Updated GSR...we have confirmation of the breakdown of the bearish wedge...

GSR 2.png
 

solarion

Gold Member
Gold Chaser
Site Supporter ++
Joined
Nov 25, 2013
Messages
5,594
Likes
7,986
GSR down to 78.5 ...that was fast.
 

Uglytruth

Gold Member
Gold Chaser
Site Supporter
Joined
Apr 6, 2011
Messages
7,401
Likes
12,035
Hey something is wrong with the Kitco chart. Silver is over $17 & that just can't happen so it's gotta be broken. I'm not getting my hopes up.
 

Strawboss

Home Improvement Sales Trainee...
Site Mgr
Site Supporter
Joined
Mar 31, 2010
Messages
6,991
Likes
12,590
Hey something is wrong with the Kitco chart. Silver is over $17 & that just can't happen so it's gotta be broken. I'm not getting my hopes up.
Chicken...quack...quack...quack...

LOL
 

Strawboss

Home Improvement Sales Trainee...
Site Mgr
Site Supporter
Joined
Mar 31, 2010
Messages
6,991
Likes
12,590
gsr3.png

I expect to see a retest of the breakdown trendline...

Many of the miners gave a pretty ugly candlestick today - so not surprised if we see a bit of consolidation/backfilling for next several days...

No cause for alarm...this GSR ratio chart signals a significant change in trend...which is bullish.
 

savvydon

Gold Member
Gold Chaser
Joined
Dec 14, 2010
Messages
3,304
Likes
3,057
Today was a pretty wicked silver spanking... Seems pretty clear there is a struggle going on.
 

Strawboss

Home Improvement Sales Trainee...
Site Mgr
Site Supporter
Joined
Mar 31, 2010
Messages
6,991
Likes
12,590
Today was a pretty wicked silver spanking... Seems pretty clear there is a struggle going on.
Yes - there will be a struggle...Remember I said to expect a retest of the breakdown trendline? Not quite there yet...

And as far as this being a "wicked silver spanking"...lol. This was mild. I have been involved in the silver markets for many years now...and I have said many times over the years that you have to have balls of steel to play in this sandbox. Silver will rip your throat out. Viciously. What you saw today is nothing compared to what silver is capable of... Why?

Its a tiny, tiny market. Soooo tiny that just about any player with deep pockets can influence it (in the short term). And they DO. For all sorts of reasons. Sometimes its to scalp a profit. Other times its to influence its big brother gold... Right now its reacting to the rise in the US dollar. The rise in the US dollar is a counter trend really (short covering).

But - what I can say to you confidently is this...silver is money. Its constitutional money. It has been used as money for thousands of years. It is one of the most amazing elements...tremendous numbers of industrial uses...for its antimicrobial properties, its electrical conductivity properties, for its reflective properties...Its truly an amazing metal...

The GSR ratio will resolve itself...and we will see it trade back in the 50's which has been its average over the past many years. On an overshoot we will see the 40's again (perhaps lower than that on a spike).

We are in the early stages of what I think is going to be a tremendous bull market in PMs. There are going to be times when we are all celebrating and posting rockets...and there are going to be times when we are dazed and confused - having just had our throat ripped out. This is all part of it. If anyone cant handle the ups/downs then perhaps they should focus on markets that are less volatile.

Its important to remind yourself on days such as today of what the underlying fundamentals are...

Silver is in deficit...meaning there is more being consumed than being produced each year. And the consumption is increasing because there are so many industrial applications for silver.
Silver scrap recycling is at a 26 year low.
Silver is currently very undervalued when compared to gold.
There are not that many primary silver miners out there as most silver is a byproduct of other mining (copper, zinc, etc...)
The US government is going to be running trillion dollar plus deficits FOREVER.
We are still in the early stages of the baby boomers retiring - and the financial impacts they are going to have on Medicare, Social Security, and pensions is yet to come.

Yes - they can push paper in a vain attempt to cap the price of silver. But only to a point...and we are near that breaking point.

And the more they push the price down - the more pent up energy the silver market will acquire for its ascent. Many years ago Axstone posted a picture of a beach ball forcibly pushed underwater. It was a metaphor of the price suppression attempts and his view of what would ultimately happen when those efforts failed. And they did fail as gold went from $650 to $1900...and silver from $8 to $50. This bull market we are in now (even though it desnt seem like one)...is going to dwarf the last one. Bigly.

Just my opinion...

GSR 1.png
 
Last edited:

Uglytruth

Gold Member
Gold Chaser
Site Supporter
Joined
Apr 6, 2011
Messages
7,401
Likes
12,035
we will see it trade back in the 50's which has been its average over the past many years. On an overshoot we will see the 40's again
So we should buy as many oz of silver as we can with the thought of selling at least part of it when it hits 50's & trade that for gold to get more oz or fiat profit? That would be about a 60% gain / profit right?
 

Strawboss

Home Improvement Sales Trainee...
Site Mgr
Site Supporter
Joined
Mar 31, 2010
Messages
6,991
Likes
12,590
So we should buy as many oz of silver as we can with the thought of selling at least part of it when it hits 50's & trade that for gold to get more oz or fiat profit? That would be about a 60% gain / profit right?
That would be a very, very solid strategy. And if you can get a local coin shop to play ball...you can actually do it without incurring any capital gains taxes...
 

the_shootist

Midas Member
Midas Member
Midas Supporter
Joined
May 31, 2015
Messages
37,389
Likes
53,358
Today was a pretty wicked silver spanking... Seems pretty clear there is a struggle going on.
There's always a struggle going on and I'm certain the high rollers are making money hand over fist at every opportunity
 

Weatherman

In GIM since 2006
Gold Chaser
Site Supporter ++
Joined
Mar 30, 2010
Messages
2,974
Likes
3,751
So we should buy as many oz of silver as we can with the thought of selling at least part of it when it hits 50's & trade that for gold to get more oz or fiat profit? That would be about a 60% gain / profit right?
My view is that we should buy physical silver (or gold) to store securely as insurance against the financial disaster we will know as the transition, and to preserve some real wealth for the other side. However, I do not buy physical silver with an intention of selling some of it at $35 (a double!), or $50, or $100, or another higher fiat price. The buy-sell spread on physical is not as good as for stocks, and it is a PITA to move physical to sell (especially if in a rush during a financially difficult time). For funds that I allocate to investment for buy low now and sell higher later, I much prefer to buy good quality miner stock through a brokerage. I expect to gain significant leverage as the price of silver rises, and I can liquidate any of it in a moment with a simple sell transaction. My favorite choices now are WPM (primarily silver) and RGLD (primarily gold), but I also like PAAS and AEM. All of them are backed by real metal in the ground. They pay higher dividends than I can get as interest in a bank savings account (so waiting for the price to move higher isn't as painful as it would be with physical), and they provide far more leveraged appreciation than physical or any bank can offer. I recognize a risk that TEOTWAWKI could happen without warning and over a weekend, so I may not be able to liquidate my mining shares, but that is a risk I am willing to take with some of my investment funds. YMMV so DYODD, and do it the way that works best for you.
 

Weatherman

In GIM since 2006
Gold Chaser
Site Supporter ++
Joined
Mar 30, 2010
Messages
2,974
Likes
3,751

Thecrensh

Gold Member
Gold Chaser
Joined
Jun 26, 2013
Messages
7,385
Likes
10,190
My view is that we should buy physical silver (or gold) to store securely as insurance against the financial disaster we will know as the transition, and to preserve some real wealth for the other side. However, I do not buy physical silver with an intention of selling some of it at $35 (a double!), or $50, or $100, or another higher fiat price. The buy-sell spread on physical is not as good as for stocks, and it is a PITA to move physical to sell (especially if in a rush during a financially difficult time). For funds that I allocate to investment for buy low now and sell higher later, I much prefer to buy good quality miner stock through a brokerage. I expect to gain significant leverage as the price of silver rises, and I can liquidate any of it in a moment with a simple sell transaction. My favorite choices now are WPM (primarily silver) and RGLD (primarily gold), but I also like PAAS and AEM. All of them are backed by real metal in the ground. They pay higher dividends than I can get as interest in a bank savings account (so waiting for the price to move higher isn't as painful as it would be with physical), and they provide far more leveraged appreciation than physical or any bank can offer. I recognize a risk that TEOTWAWKI could happen without warning and over a weekend, so I may not be able to liquidate my mining shares, but that is a risk I am willing to take with some of my investment funds. YMMV so DYODD, and do it the way that works best for you.
So you're not in agreement that having 500-odd oz of silver on hand is a good strategy?
 

Weatherman

In GIM since 2006
Gold Chaser
Site Supporter ++
Joined
Mar 30, 2010
Messages
2,974
Likes
3,751
My view is that we should buy physical silver (or gold) to store securely as insurance against the financial disaster we will know as the transition, and to preserve some real wealth for the other side.
Tell me which part of this is difficult to understand, and I will try to explain it better. :beer:
 

Strawboss

Home Improvement Sales Trainee...
Site Mgr
Site Supporter
Joined
Mar 31, 2010
Messages
6,991
Likes
12,590
Here is the most recent COT report for gold. I pay particular attention to what the swaps dealers are doing - as they seem to have a very good track record of being short at tops...and long at bottoms... in other words...if you want to know whats gonna happen to the price of gold...watch the swaps dealers...

gold cot.png


From the current setup - its reasonable to assume at least a $100 rise in the POG from here...and the potential for a $300+ move...said upwards move to last at least a few weeks (if a $100 move) to a few months if its a bigger move. The swaps dealers are the ones saying this is going to happen...right here...right now - and you can look at their track record for yourself. They seem to always be on the right side of trends...

So - why posting this on a silver thread? What do you think silver does when gold moves? LOL

Oh - remember me saying I was expecting a backtest of the GSR ratio breakdown after it fell through the bearish rising wedge?

gold cot.png
GSR4.png
 

Strawboss

Home Improvement Sales Trainee...
Site Mgr
Site Supporter
Joined
Mar 31, 2010
Messages
6,991
Likes
12,590
Everything is lined up for a rally in the metals. We are locked and loaded. The only thing missing is a catalyst to light the fire...and my guess is its gonna be either the Israel/Iran/Syria thing (tanks on border) or the Jerusalem embassy thing...but whatever its gonna be - its gonna happen in the next few days/weeks.

If I am wrong (always possible) - I believe it would be a brief but sharp correction as a way to clear out the stops below $1300 in gold and $16 in silver. If that was to occur - I would reposition my options on the mining sector to a shorter duration (6 months instead of LEAPs) that is slightly above the money.
 

Weatherman

In GIM since 2006
Gold Chaser
Site Supporter ++
Joined
Mar 30, 2010
Messages
2,974
Likes
3,751
I too feel a strong rally will start soon, but I am keeping a significant amount of cash in reserve. The dreaded summer doldrums of May through July are not a time when I am eager to bet more on the upside.
 

Varmint Hunter

Gold Member
Gold Chaser
Midas Supporter
Joined
Apr 10, 2010
Messages
731
Likes
1,582
Here is the most recent COT report for gold. I pay particular attention to what the swaps dealers are doing - as they seem to have a very good track record of being short at tops...and long at bottoms... in other words...if you want to know whats gonna happen to the price of gold...watch the swaps dealers...

View attachment 103748

From the current setup - its reasonable to assume at least a $100 rise in the POG from here...and the potential for a $300+ move...said upwards move to last at least a few weeks (if a $100 move) to a few months if its a bigger move. The swaps dealers are the ones saying this is going to happen...right here...right now - and you can look at their track record for yourself. They seem to always be on the right side of trends...

So - why posting this on a silver thread? What do you think silver does when gold moves? LOL

Oh - remember me saying I was expecting a backtest of the GSR ratio breakdown after it fell through the bearish rising wedge?

View attachment 103748 View attachment 103749
Thanks Strawboss for this information!
Could you please educate me on where to find these charts showing the swap dealers activity?
Many thanks!
 

Strawboss

Home Improvement Sales Trainee...
Site Mgr
Site Supporter
Joined
Mar 31, 2010
Messages
6,991
Likes
12,590
Thanks Strawboss for this information!
Could you please educate me on where to find these charts showing the swap dealers activity?
Many thanks!
I subscribe to COTbase - but there might be free sources out there as well I am sure. Of course you can always get the data yourself directly from the CFTC every Friday afternoon at this link https://www.cftc.gov/MarketReports/CommitmentsofTraders/index.htm - but that would require that you collect, assemble and then analyze the data graphically in some fashion...

You have to make sure you are viewing the disaggregated data (which is where the swaps data is broken out into its own category)...and not the classic data which lumps the swaps dealers in with the commercials.

Its just easier for me to subscribe and have the data at my fingertips than to waste time gathering it myself.
 

Strawboss

Home Improvement Sales Trainee...
Site Mgr
Site Supporter
Joined
Mar 31, 2010
Messages
6,991
Likes
12,590
Here is a zoomed in view of the gold COT focusing just on the past 12 months. Again - focusing on the swaps dealers - it is very rare for them to be net long...and historically the ONLY times this happens is at bottoms. The swaps dealers are net short 99% of the time. Let that sink in for a minute so you truly grasp what I am saying.

gold cot2.png


I don't believe there is a more powerful signal than when the swaps dealers are net long (as they are now). You typically only get these sorts of setups once every few years (this is our 3rd one in the past 12 months)...

Combined with the GSR...this is a POWERFUL setup with an extraordinarily favorable risk/reward ratio - which is why I am positioned in LEAP options - something I have only done 1 other time in my life.

This is the sort of trade you only get a couple cracks at in your life...

DYODD...
 

Varmint Hunter

Gold Member
Gold Chaser
Midas Supporter
Joined
Apr 10, 2010
Messages
731
Likes
1,582
A big thank you StrawBoss!!
I really appreciate you sharing this info with us & it looks like we may be in for some exciting times.
 

Strawboss

Home Improvement Sales Trainee...
Site Mgr
Site Supporter
Joined
Mar 31, 2010
Messages
6,991
Likes
12,590
Well - the rally in the metals hasn't played out as I thought it would. In fact - they have mostly traded sideways the past several months. Having said that though - I am becoming more and more convinced that $14 silver is a long term low. I have mentioned this price for silver several times before going back the past few years as its the 78.6% Fibonacci retracement from the initial low in silver of $2.52 to the high near $50 reached back in 2011.

We have had a couple of bottoms at the $14 area and price has hovered slightly above it the past several months.

The GSR ratio is stubbornly above 80 which is at nosebleed levels.

I have become convinced that $14 silver represents bedrock. That isn't a guarantee of course - just my opinion. That means that silver can only go either sideways...or up from here. And its been going sideways for the past few months.

I think it would be wise to move your gold into silver at this juncture. The risk:reward heavily favors this.
 

Thecrensh

Gold Member
Gold Chaser
Joined
Jun 26, 2013
Messages
7,385
Likes
10,190
Well - the rally in the metals hasn't played out as I thought it would. In fact - they have mostly traded sideways the past several months. Having said that though - I am becoming more and more convinced that $14 silver is a long term low. I have mentioned this price for silver several times before going back the past few years as its the 78.6% Fibonacci retracement from the initial low in silver of $2.52 to the high near $50 reached back in 2011.

We have had a couple of bottoms at the $14 area and price has hovered slightly above it the past several months.

The GSR ratio is stubbornly above 80 which is at nosebleed levels.

I have become convinced that $14 silver represents bedrock. That isn't a guarantee of course - just my opinion. That means that silver can only go either sideways...or up from here. And its been going sideways for the past few months.

I think it would be wise to move your gold into silver at this juncture. The risk:reward heavily favors this.
Sorry guys...I pulled the trigger on some ASEs, so I'm to blame for the PM doldrums (contrary to what you may read in the papers, blogs and online). Apologies to all.
 

Son of Gloin

Certainty of death? What are we waiting for?
Gold Chaser
Midas Supporter
Joined
Apr 6, 2010
Messages
6,831
Likes
14,900
Location
USA
Not to worry, everyone. I just dropped a bunch of frn's on the bland looking yellow metal. Silver is almost surely going to explode upward from here. Get ready...
 

solarion

Gold Member
Gold Chaser
Site Supporter ++
Joined
Nov 25, 2013
Messages
5,594
Likes
7,986
I too have been stacking white copper a bit at a time. The never ending blue light special relative to gold and the FRN cannot go on forever. That silver's ATH in absolute dollar terms remains Jan of 1980...nearly 39 years ago is beyond ridiculous...nevermind the Hunt brothers fairy tale. Gold is +43% in absolute dollar terms while silver is -71% during that time. lol

Meanwhile the cumulative rate of inflation during that time in the unit of account, the US dollar, is 206%. An ounce of silver that cost $49.45 in 1980 would be $151 in 2018...yet one can obtain 10.5 ounces of silver at spot for that. There are no other commodities that behave this way...it's clearly suppressed and does not reflect the principles of supply and demand.
 

gringott

Killed then Resurrected
Midas Member
Site Supporter ++
Joined
Apr 2, 2010
Messages
15,453
Likes
21,016
Location
You can't get there from here.
The weirdest thing to me is that silver and gold in the grand scheme of things meaning asset prices and size of the market are literally small potatoes. Plenty of these fat cats could corner the whole market if they wanted [or were allowed to].
 

gringott

Killed then Resurrected
Midas Member
Site Supporter ++
Joined
Apr 2, 2010
Messages
15,453
Likes
21,016
Location
You can't get there from here.
Not to worry, everyone. I just dropped a bunch of frn's on the bland looking yellow metal. Silver is almost surely going to explode upward from here. Get ready...
I too have been stacking white copper a bit at a time. The never ending blue light special relative to gold and the FRN cannot go on forever. That silver's ATH in absolute dollar terms remains Jan of 1980...nearly 39 years ago is beyond ridiculous...nevermind the Hunt brothers fairy tale. Gold is +43% in absolute dollar terms while silver is -71% during that time. lol

Meanwhile the cumulative rate of inflation during that time in the unit of account, the US dollar, is 206%. An ounce of silver that cost $49.45 in 1980 would be $151 in 2018...yet one can obtain 10.5 ounces of silver at spot for that. There are no other commodities that behave this way...it's clearly suppressed and does not reflect the principles of supply and demand.

What is this, Oprah? Everybody is confessing.
 

solarion

Gold Member
Gold Chaser
Site Supporter ++
Joined
Nov 25, 2013
Messages
5,594
Likes
7,986
Plenty of these fat cats could corner the whole market if they wanted [or were allowed to].
Haven't the fat cats already done that with their ETF scams, commodity "exchanges", and leveraged contracts? They swap counterfeit gold and silver paper/electrons back and forth while hardly being bothered with the underlying asset allegedly being "traded". Obviously if an "unlicensed" individual or group of individuals were to do these things they'd quickly be kidnapped and stashed away in a rape cage, but so called "market makers" do these things on a daily basis and call it a "service".