SilverPete said:
Pirocco said:
Here I am again!
Fresh from the start!
At current price good for another 7 kilo.
Anyone shot his ammo today?
I didn't!
What are you waiting for? There seems to be a lot of resistance at the current price level.
Don't just look at the price.
This is how the money for nothing club 'creates' such a 'resistence level':
1) Suppose spot price is $20
2) Alot people decide to sell their silver (doesnt matter whether back to dealer or to another stacker), an amount representing 2 price dollars.
3) Normally this would move the price $2 down, so giving $18
4) But instead of allowing that to happen, the futures market players increase their total net position (so they go more towards the long side, and/or less to the short side), and they 'replace' those 2 price dollars. For ex, it could be bullion dealers that want to keep people willing to pay that $2 higher price.
5) So what happened: while the price seems to have stayed flat/stable/the same, so appearing as a 'resistence level', in reality, alot people sold, and the spot price now reflects Comex positions of 5000 ounces instead of delivered stacks.
6) Since a silver futures position near to never end in actual delivery of the silver, those 2 price dollars are bogus / temporary, and cancelling the positions will let the original sales finally be reflected in the spot price.
And that's what I see happening (middle column is the total net amount positions of 5000 ounces)
15/04/2014 23294 $19.45 <- 23294 positions around $19.5 <- LAST WEEK
08/04/2014 28905 $20.02
01/04/2014 28442 $19.80
25/03/2014 31755 $19.96
18/03/2014 35900 $20.84
11/03/2014 37634 $21.32
04/03/2014 39769 $21.14
25/02/2014 38985 $21.81
18/02/2014 32853 $21.62
11/02/2014 22417 $20.135
04/02/2014 14852 $19.525 <- 14852 positions around $19.5 <- REFERENCE 4
28/01/2014 21033 $19.59
21/01/2014 23951 $19.93
14/01/2014 24809 $20.05
07/01/2014 25529 $19.7
...
06/08/2013 10300 $19.43 <- 10300 positions around $19.5 (august 2013) <- REFERENCE 3
...
02/07/2013 7769 $19.44 <- 7769 positions around $19.5 (juli 2013) <- REFERENCE 2
25/06/2013 4093 $18.925 <- 4093 positions around lowest price since 2008 <- REFERENCE 1
So in two weeks, the Comex players 'hided' sales of 23294-14852=8442 x 5000 = 42.2 Moz silver (not exact of course) since REFERENCE 4.
There are 2 things to also take into account here:
- that 14852 is a decade low position, it may be unlikely to be revisited alot (in order to judge I'd need to find date for the 1980-2000 Comex position, updated every week (at least in my time)), but considering we are after a decade bull trend, I doubt it.
- it IS possible that they wait long before dumping the positions. For ex, during 2009 and 2010 they sat most of the time around a 50000 position. But during that period, most of the ETF silver stocks were bought, so there was quite some demand that made them unwilling to allow the price to go lower. Since ETF's ceased to buy more since over a year, that demand isn't there anymore so they have no reason anymore to keep the price up, especially if other people use the opportunity to 'get out'.
Relative to REFERENCE 4, LAST WEEK was (already calculated above) 42.2 Moz more silver sold.
Relative to REFERENCE 3, LAST WEEK was 23294-10300=12994 x 5000 = 65 Moz more silver sold.
Relative to REFERENCE 2, LAST WEEK was 23294-7769=15525 x 5000 = 77.6 Moz more silver sold.
Relative to REFERENCE 1, LAST WEEK was 23294-4093=19201 x 5000 = 96 Moz more silver sold.
The most recent (REFERENCE 4) is the most accurately reflecting current situation, and since it needs a very rude 60 Moz to move the price 1 dollar, it means 0.70 dollar, so 19.50-0.70=$18.80. So that is a very reasonable possibility, which I will certainly wait for.
REFERENCE 3 is $1.08 so a spot of $18.42, which has a fair chance.
REFERENCE 2 is $1.29 so a spot of $18.21, which has a low chance.
REFERENCE 1 is $1.6 so a spot of $17.9, which has a low chance.
That's how it was last week tuesday.
If others keep on selling more and/or buy less, like they do since a couple years, then the price will drop even lower than the mentioned prices.
If the Comex would become net neutral (so a zero net position) now, then the price would drop 23294 x 5000 = 116.47 Moz / 60 Moz = $1.94 so a spot price of $17.56.
During april so far, ETF's had a neglectable effect on the price, one bought a couple Moz but another sold a couple Moz so no net effect worth speaking of.
So don't judge alone on the spot price. If one that bought silver with the intention to keep it 10 years, sold already after 2 years, and one with the intention to keep it 2 months, bought it, then that means that not over 10 years, but over 2 months the price will drop the corresponding amount. Despite the spot price seeming to be a 'resistence level'.
The same happened after the august 2012 -> october 2012 uptrend. A steadily increasing Comex position at a certain price. Back then I also saw the opposite happening at the peak of $35 then, the Comex position dropped while the price remained, meaning others sold, and the Comex players also hiding it at that peak price. I had the idea that those that sold then, would buy back in later, and prevent the price from dropping more. So I thought $27 was a good price to target, and I also bought there. Wrong. They did NOT buy back in, and I 'wasted' my ammo at $27 to see $22 in Q1 2013. Same story repeated, after a next upspike I bought at $22, to then see $19. So I decided to stop assuming that they will buy back in, and wait for the price that my above method suggests. So far I didn't have to regret it. I know one time it will be wrong again, and I'll have missed the boat. But in meanwhile, I'll have enough boat trips succeeded.
