The 'reverse head and shoulders' - quoted of late - to complete the cycle needs to maintain at 33-34 for a period, followed by a rally to 35 and hold to fully complete this cycle. Silver is holding at 33.99 - bless its' shiny soul. [but opened Monday 20 cents down with the gap between ASX & NYMEX] It is near entering the fifth week in this cycle so a correction must be near term - in my opinion. However, some analysts are calling this rally the start of something bigger in silver. I am leaning on the wait and see approach and reduced volumes and closed some positions on Friday. This was purely as a precaution as the time range from closure to reopen from Friday to Monday puts about 4-5 hours on the board. A lot can happen in four hours. Regardless, it is only a technical blip on the screen to cap off a perfect reversal in the completion of the head and shoulders. We shouldn't forget either, Clive Maund posted the other week stating silver would head to 33 then reverse severely. I will be watching for his view on current trends this week. Remember it was just weeks ago the bears were roaring from all quarters now the bulls are calling the shots from the woodwork. Silver has now advanced through the 50, 100 and 200 day moving averages in this uptrend with zero corrections that I can see. Although some charts are contradicting the movement through the 200 day MA. Hmmmm - which ones do I trust! I can't laugh but I feel better now with this latest upswing. It would be nice to rally above the MAs to set the bull in firm and solid and to post some solid gains. However, we are never home and hosed as the next battle is already in play.
I am speculating that the return of the Chinese might dampen our enthusiasm. The week without all the little peckers has been comforting to say the least. I admire them but they frequently seem to chew up the upside. Sometimes Chinese day traders are like the tides on steroids - they come and go at a rapid pace and leave taking the profits with them. Europe frequently does the same thing and the ASX is hitting on last weeks highs as I write. You know the law of averages says 'what goes up must come down.'
It might be comforting to consider though, that all the little investors are corporately getting bigger. It is in my opinion the little guys that have won this battle. Many, in fact, most of the big corporates called bears. We flew in the face of negativity and proceeded to the heavily armed gate that screamed closed - no bulls allowed. Congratulations to all the bullish crew at WSW and beyond. Thank you Mr America - we couldn't have done it without your faith and the steadfast belief and patience of the guru at WSW. Enough accolades but truly - thanks for the moral support ladies and gentlemen.
I still think with what Jim Willie has posted that this battle is far from over so the accolades are somewhat in jest.
An economic war front is going to be pulled out of this latest bull, coupled with other fronts that have loomed big on the horizon. But we don't know what kind of implements the big players have in their armoury this time around. Remember, last time Ben the Bank laid out the 'range of tools at the Feds disposal' - silver got the right old 'hammer.' Don't discount the continual power of stealth. Jim Willie is sprouting shorts flooding in on the bulls territory if I read him correctly.
I think also this week will possibly be increasingly volatile as the big players attempt to shake some nuts from the trees by triggering stop losses.
When it comes to the Iranian nuclear bramble, London has its' hands tied with the Olympics which is great, so any call to physical intervention in Iran is at least a year away in my opinion. Just imagine the nations that would potentially boycott the games this year if a preemptive strike as a 'just cause' were to be called and commissioned. Besides that they will meet with some stiff physical opposition if China, India and Russia got behind Iran. India is still soured by the British occupation - they will never forget the shame - and are independent in their own rights now. They have very close ties with Russian military strategies and are a watchful and valued inclusion in the Shanghai Cooperative Treaty. However, they are not fully fledged members as of SCO yet. It will be WW perpetual if a preemptive strike is fashioned out of this one. I think at the moment there are no 'red flags' out as it is bluff from every angle. The USA has never invaded another nuclear power and I don't think they are ready for WW3 just yet. Abanaminejad has also called for talks with the 'powers that be' late last week.
I am going to call a high likelihood of contract margin hikes in this battle - as the first range of implements to be used - possibly next week. Especially if or as PMs go in for a correction to the downside. After all the Chinese led the last foray on that move and I have posted why repeatedly. Highly priced silver works against manufacturing industries. A large manufacturing based economy like China needs relatively stable prices in commodities like silver to control material costs.
I can't see the 'powers that be' not taking a shot at the bulls in this round. The dollar pundits and those who desire the strong USD will not be pleased with the hammer the 'greenie' is getting either. I recall some analysts shorting major Chinese banks not long ago - I laughed at that one. Now the shoe is on the other foot as major US banks have the powers of the shorts right across the board. Hmmm - economic war zone or the flavour of the month? I'm not sure at all.
With this and other factors sliding into the quagmire, the upward trend can be maintained if 'powerful sentiment' swings positive to back the bulls. I believe it needs more than just the little guys but needs some big players to jump on-board as well and send some sky-rockets heavenwards. Speaking of fireworks, the Chinese businesses go back today; so since about 6am this morning it has been a continual 'crackerfest' lighting up the sky. The Chinese ward off the 'evil spirit of Nian' from their businesses as well. The crackers are said to scare the old monster back into the forest. It seems to me the rhetoric to scare off Iran has totally backfired this time. They are calling the bluff and have big-time friends backing them up. Jim Willie is basically calling this a 'paradigm.' You know, I think he is right! It has been my call for a long time as well.
Howard Katz once wrote, "To manipulate any free market is virtually impossible ... and there has been no successful manipulation on record in economic history." [I took it out of context!]
BUT, he said it and suggested a crash course in economics can prove it ... very interesting view of Austrian economics!
What is futures if it is not manipulative to some degree? What is war for oil if it is not manipulative economics. And I might add, what is nuclear proliferation if it is not a manipulative tactic to make others sit up and listen. After all, the five permanent and founding members of the United Nations are and were all nuclear powers! In my opinion, economic wars are full of manipulation and nobody does it better then the cartel. After all, social engineering has been full of manipulators from day one! Welcome to the world - where the power of unity is not the the power that is omniscient in the hearts and minds of planetary citizens.
I perhaps need an education.
What's your view?
The link to Katz