And yet another rabbit out of the hat.....? http://seekingalpha.com/article/259...ke-and-take-delivery-of-its-own-silver-shorts
I've been looking at the charts above several times today thinking 'geez, the ction is volatile today". On closer inspection the scale is deceptive. Silver has mainly been sub $0.50 moves which is very typical. Gold has also been mainly smaller moves that look dramatic on the table.
Silver should be at its lowest today because of Comex Options Expiry right? .... Last time was Jan 26 when it went under $27 ..... So after tomorrow it should start moving back up again. I guess given options Expiry is today, support at $37 is impressive.
newbie question time. What makes it crash back after we get excited about $38? Some say JPM injects money somewhere? Personally, I hope it stays low till I can manage 1000 oz's
Hi C-Heath, The spot price reflects both the actions of both buyers and sellers. Very often traders use automated systems to process their buys and sells at certain discrete price levels. Now, If I'm a buyer, I want to buy at the lowest possible price, so I will ask my computer (or my broker) to purchase at the current price - or I will wait for a lower price. I very rarely ask to a 'higher' price - although that does happen for certain good reasons that I won't go into here. But if I'm a seller I might chose a certain sell price that's HIGHER than the current price, and wait for that price to be reached for trade will be executed. These people often select integer numbers like 38, 50, or 70 etc. (generally) This means that as the price goes up, and 'touches' the next integer number (say 38), it is likely that a bunch of automated SELL orders will be triggered. This selling action tends to move the price down. So very often you will see the spot price 'bounce' downwards off a new key price point. This may happen several times. Furthermore, you sometimes notice that when the spot price DOES eventually 'push through' these 'resistance lines' that it does so with significant energy, and often settles a few points higher than the resistance line itself. At this point a curiousthing happens - the 'resistance line' becomes a 'support line' and the price will bounce generally now bounce 'upwards' off that dollar point. (like a bouncing ball off a hard floor) This indicates that a number of traders have raised instructions to BUY when that (now) 'lower' level is reached to the downside. Hope this helps. This is pretty general, but you see it a lot
Yes but don't forget the short selling - selling something you don't own which you have to buy back at a later date. This is a tool used to manipulate silver because it creates a supply of silver on paper which doesn't exist in real life. That extra supply drives the price down. The reason the price gets bumped down so violently is because of more short selling. If the price rose quickly then the short sells would have to be converted at much higher prices and cost a lot more money AND create demand (buying) in the market which would rise prices further. The result? Keep shorting silver to supress the price, BUT it's debatable if this can be sustained much longer. So jpm don't inject money, they sell silver that doesn't exist. And now they have a vault to 'deliver' silver that doesn't exist and nobody will have a clue what is actually happening.
