Merged Silver Over 40.00 / Real and fake prices

[Fudbucker]

I think your charts have steered you wrong, Kevsta. Silver's at $28. I think it will keep dropping as the market hits new highs and people start cashing out of commodities.

 

[kevsta]

I think your charts have steered you wrong, Kevsta. Silver's at $28. I think it will keep dropping as the market hits new highs and people start cashing out of commodities.

did you have a particular market in mind? ..so the contrarian play is long silver, short the market then, isnt it...?

I'll take that bet from here all day long

I should add that I wouldn't personally extrapolate too much from the shambolic broken market price action, the Bernank broke it all.

unless declining prices are normally a function of surging demand that is?

 

[Fast Eddie B]

Could not quite figure out that last post.

Is silver going up? If so, in what time frame?

Is silver going down? If so, in what time frame?

Or will it "trade in a narrow range"? If so, for how long?

Or was a market that had been predictable by interpreting charts suddenly rendered a "random walk" by Bernanke?

 

[kevsta]

Could not quite figure out that last post.

Is silver going up? If so, in what time frame?

Is silver going down? If so, in what time frame?

Or will it "trade in a narrow range"? If so, for how long?

I only really have a long term view on silver, and that is massively bullish. I don't think its any stretch of the imagination at all to expect similar performance to the last decade, possibly way more.

as to when, I am losing interest in predicting certain prices at certain dates lately, it is true

Or was a market that had been predictable by interpreting charts suddenly rendered a "random walk" by Bernanke?

im not saying that all markets have always been predictable by charts at all in the past, but pretty much all markets are now broken with regards to fundamentals IMO.

however, you will be pleased to know (for longetivity of this conversation if nothing else) that it is still (more than ever) my contention that within the maelstrom of daily randomness, there are deliberate cycles and not-so-random price moves, and that if you can see it, and can keep to high risk:reward trades only, then it is possible to extract money out of the market.

here's March's demo trading figures, again on a $100k base.

am still honing strategy on demo - this month less trades, higher risk per trade, worked out well.

and it's going live on a tiny test account from next week, trading micro lots on Forex only, and less aggressive than the above. if I can settle into about 10-15% per month I will obviously be more than pleased. just think of all the extra bargain silver I can buy with the free digits

 

[trustbutverify]

did you have a particular market in mind? ..so the contrarian play is long silver, short the market then, isnt it...?

I'll take that bet from here all day long

I should add that I wouldn't personally extrapolate too much from the shambolic broken market price action, the Bernank broke it all.

unless declining prices are normally a function of surging demand that is?

When the price action confirms your short term predictions, it's because your trend lines and pivot points are valid indicators. When things turn south, it's because the ebil Bernank "broke" the market.

Maybe there's a Rothschild or two frustrating normal supply/demand?

 

[kevsta]

When the price action confirms your short term predictions, it's because your trend lines and pivot points are valid indicators. When things turn south, it's because the ebil Bernank "broke" the market.

you are not keeping up, I've evolved a better understanding of charts & tech indicators lately.

I said a while back that I had only gotten profitable since I accepted the blatant daily manipulation in the markets and learned how to identify it and hop on for the ride. this is not the Bernank Im talking about, just Forex bank business as usual.

but yes, the Bernank has broken all the markets. I am far from the only person who thinks this.

Once you start to view price action the way market makers do, to trap the maximum volume of people going the wrong way at any one time, recognise their trap moves, and hop on with them for the ride..

so as I said, it's not TA by traditional means, it's understanding how market makers use retail traders using TA to take their money off them..

different thing entirely.

I should elaborate here also, I am moving towards your line of thinking that TA is fundamentally flawed, but for different reasons I think, my reason/s being more along the lines that although it kind of works sometimes, this is how brokers and the industry keep their clients coming, ..while/until they abuse the hell out of them from the other side of the screen.

support / resistance / trend lines etc all hold and work until there is enough money on the other side of them in the form of orders / stops, to go and get, and then TA fails and market makers bank the money.

Maybe there's a Rothschild or two frustrating normal supply/demand?

I dont think there's any Rothschild connections to the 10 major Forex banks that drive 60% (- 70% most recent estimates) of the volume of the $4-5 Trillion per day market, but I haven't looked specifically.

http://en.wikipedia.org/wiki/Foreign_exchange_market#Market_size_and_liquidity

and I think we can all rest assured that none of these might ever manipulate anything for their own gain..

Top 10 currency traders [60]% of overall volume, May 2012
Rank Name Market share
1 Germany Deutsche Bank 14.57%
2 United States Citi 12.26%
3 United Kingdom Barclays Investment Bank 10.95%
4 Switzerland UBS AG 10.48%
5 United Kingdom HSBC 6.72%
6 United States JPMorgan 6.6%
7 United Kingdom Royal Bank of Scotland 5.86%
8 Switzerland Credit Suisse 4.68%
9 United States Morgan Stanley 3.52%
10 United States Goldman Sachs 3.12%

and who cares whether they actually are or not, interestingly, if you just trade as though they are, you can take some numpty's money who doesn't get it

 

[kevsta]

US Mint fudging the March silver sales figures to avoid showing an all-time record in March too, on the back of all time sales records for January and February?

it sure looks like it.

(for the benefit of those who won't watch videos, the March numbers stopped moving at 3.5 million Oz - five days from the end of the month, and on 01 April Easter Monday - closed) they suddenly sold another 812k Oz, which if it were added in the correct month would have been a 3rd record month in a row)

 

[Fast Eddie B]

Thanks for that.

I've done some calculations and found when I add that data in, the fair market value of silver should be exactly $27.64/oz.

When I opened up my iPad app which gives the price of silver with EVERYTHING factored in, it agreed exactly!!!

Amazing.

Now, to be useful...buy, sell or hold?

 

[kevsta]

Thanks for that.

I've done some calculations and found when I add that data in, the fair market value of silver should be exactly $27.64/oz.

When I opened up my iPad app which gives the price of silver with EVERYTHING factored in, it agreed exactly!!!

Amazing.

Now, to be useful...buy, sell or hold?

what does your app say?

 

[Fast Eddie B]

what does your app say?

It's frustrating.

For the one I've been using its devilishly hard to differentiate its output from a random number generator.

I've had another recommended to me. Let me play with it and delve into its algorithms and I'll let you know what it says.

 

[Fast Eddie B]

OK...

Been playing around with the new app, and I don't see how it improves on the old...

 

[kevsta]

It's frustrating.

For the one I've been using its devilishly hard to differentiate its output from a random number generator.

continued profit output from the randomness..

Week 1 April. +10.8% - same as the whole of Feb.

so we have +10.8% Feb
+33.7% Mar
+10.8% Week 1 April

Total +55ish % in 10 weeks ?

and not with one or two lucky trades, but with a lot of trades.

although the fewer I take, the sharper the numbers get as you can see in the evolution of it?

would it be fair to say the random cash generation performance *appears* to be accelerating with practice and refinement?

I do wish it was a real account I had been working on at this point, however far better safe than sorry.

 

[Fast Eddie B]

That's excellent.

Is that the complete history of this account? Do you have other accounts?

I only ask because it's all too easy to cherrypick data - forgetting some of the losses. January is conspicuous by its absence unless you opened this account in February. And if this account is one of several, it's less impressive than if it's on it's own.

If you can keep up that rate of return over time I will be soundly impressed.

If you can do it with real money, that rate of return could make you very rich in very short order if you allow the gains to compound.

Good luck going forward!

 

[kevsta]

That's excellent.

Is that the complete history of this account? Do you have other accounts?

I only ask because it's all too easy to cherrypick data - forgetting some of the losses. January is conspicuous by its absence unless you opened this account in February. And if this account is one of several, it's less impressive than if it's on it's own.

If you can keep up that rate of return over time I will be soundly impressed.

If you can do it with real money, that rate of return could make you very rich in very short order if you allow the gains to compound.

Good luck going forward!

I do have other accounts but am not cherrypicking anything, this account was my original demo account opened last year early some time.

it went from 100k at open down to about $82k by Aug/Sept about the time it all went wrong and I was thinking this was impossible.

then as I told you, I had the epiphany in October, bottomed out and had gotten it back up to $100k again by Xmas, that was about the time I was saying on here that

"I think I have got this now and turned it around, and that I will be testing on demo for a few months then going (back) live"

remember? In January there was no trading because I had that big new SEO job come in, in Feb I started in earnest.

My other demo account on a different platform, where all the main forex trading goes on (better spreads) and is basically in the same situation, ie opened at €5000, got it down to an absolutely awesome €2880 or something at the lowest last year.

I had also gotten that one back up to €3k before Xmas ready for testing in 2013 and restarted trading it properly again in mid Feb on slightly different rules, (but the same methodology) aiming at 5% per month.

it's now back up to €3447 or + €392 - which from a €3k base is +13% from 14 Feb to now. again, steady, lots of trades, just win more money than you than you lose. see P&L, different format as on different platform.

and then there's the live account, started trading beginning of last week with a $250 base, with risk:reward aiming at averaging 3-7% a week

$13 @ $250 base = +5.2% ?

finally the new $1000,000 demo account I left alone after the first trade, I'll come back to that when I need to get really comfortable with trading very large numbers


there, now you have all the figures from the time 2013 testing began. less impressive to be replicating it across several accounts simultaneously ?

if I can produce another 3 months of the same, both on live micro and continued on the two demos, then I'll put a bit more into the real account and attempt to grow it large enough to be able to produce a decent wage from and still grow the account. as you say, the potential from a steady 1 or 2% % per week is basically open ended.

 

[JoeMorgue]

I think there is a core base concept that is central to economics that is being missed.

You can sit here and say X is worth Y all day long but until some with Y is willing to give Y to you in exchange for you X it's all theoretical, a best (usually very good best mind you but still best) guess.

Ever watch the pawn shows where the guy will say "I think with the right buyer that widget might fetch so and so amount" and automatically owner of said widget will assume that to mean that the widget is somehow guaranteed that price as if law or something?

It's sorta like that. At the end of the day no matter what economics says everything is worth whatever you can get someone else to pay for it, no more, no less.

If right now some economic or social crisis made the mass use of precious metals as a common form of currency happen, this would effect it's value in some way, up/down, stable/unstable who knows but it would effect it, because economics is so tied in with perception and stability and confidence.

 

[Fudbucker]

I think there is a core base concept that is central to economics that is being missed.

You can sit here and say X is worth Y all day long but until some with Y is willing to give Y to you in exchange for you X it's all theoretical, a best (usually very good best mind you but still best) guess.

Ever watch the pawn shows where the guy will say "I think with the right buyer that widget might fetch so and so amount" and automatically owner of said widget will assume that to mean that the widget is somehow guaranteed that price as if law or something?

It's sorta like that. At the end of the day no matter what economics says everything is worth whatever you can get someone else to pay for it, no more, no less.

If right now some economic or social crisis made the mass use of precious metals as a common form of currency happen, this would effect it's value in some way, up/down, stable/unstable who knows but it would effect it, because economics is so tied in with perception and stability and confidence.

The spot price IS what people are buying and selling it for.

 

[kevsta]

The spot price IS what people are buying and selling it for.

in practice as prices dip to the lows margins tend to increase on physical.

and I guarantee you would have struggled to buy any at 26.70 on Friday

 

[kevsta]

with regards to silver (and gold), the COT report for last week is a sight to behold. virtually the entire Spec funds community - managed (or dumb) money are at record short positioning, while the commercials (marketmakers, bullion banks - smart money) are the least interested in hedging they've at these prices they've ever been.

Gold and Silver Disaggregated COT Report (DCOT) for April 5 (dumb money doubles down on record leverage, smart money yawns)

Note: Spec Funds (Managed Money) have become net short silver futures as of this report. Note also the extremely low net short positioning of the Producer/Merchants for gold. The Producer Merchants, the category which includes bullion banks, have not had so few bets that gold would fall in price since the 2008 panic.

That is the same thing as saying that the large commercial traders are currently the least fearful that gold prices will fall further since December 9, 2008, when they then held just 80,669 contracts net short with gold then near $776 the ounce.

Look at them all sat on the same side of the boat. this has the potential to be spectacular when it tips over.

 

[kevsta]

will this time be different, or not?

80% probability of a 40% short squeeze in the offing for silver.

In the last 20 years, Silver shorts (in Silver futures, based on the Commitment of Traders data) has only been as high as it is currently for five periods. Four of those five periods were followed by considerable rallies in silver prices.

The one period where prices flatlined (fell modestly) was a slow and steady rise in shorts (as opposed to the spike-like move currently).

Of course, with near record amounts on the short side of the boat, it would seem clear where Silver should go next but this time is different we will be told.

Jul 1997: +70% rise over 29 weeks,
Nov 2000: -13.5% in 53 weeks,
Oct 2002: +13.2% in 12 weeks,
Apr 2003 +19% in 24 weeks,
Aug 2005 +114% in 37 weeks,
Average +40.5%

in the meantime anybody who wants to join in frontrunning the Bernank via the Kevin Henry, buy and hold is so over, just trade the low volume S&P evening rampup, its hilariously easy.

Invest In '3:30 PM Ramp Capital LP' For 26.6% Annualized Outperformance

By now it should be a surprise to no one that there is an increasingly visible hand that decides at 330pm ET stocks need to be bought 'aggressively'. This phantom - and of course entirely efficient - savior of the markets has been dominating market performance since the Cyprus situation hotted up.

It is as if a team of people were protecting the market from the plunge that Treasuries have been so clearly signaling in the last 3 weeks. We have shown the 'up-down-up' nature of the last 14 days but since the close on 3/14 (before Cyprus), the S&P 500 futures are down 5 points. In that same period, the cunning strategist who bought at 330ET and sold at the close (in S&P 500 futures) a stupendous 21.75 points (absent slippage of course) outperforming the market by 170bps (for an annualized outperformance of 26.6%) with no overnight margin payments and 30 minutes attention per day (just think of the leveraged performance!!).

Of course we bring this to the attention of the reader because the farcical rhymthicity of the market's behavior is better in the light of day for all to enjoy than just Johhny-5 and his algo friends.

in actual fact I've booked similar fading these exact moves, but I'm on manual and this would work on auto.

 

[The Don]

80% probability of a 40% short squeeze in the offing for silver.

If I read that article correctly it's predicting a significant rise in the price of silver in the near future. Of course it cannot be wrong because if the price of silver is static it's the remaining 20% of the prediction.



edited to add...

Actually it's saying that there's an 80% chance that there'll be some kind of increase (13%-114%) over some time period (12-53 weeks) which is pretty vague as predictions go. It also doesn't say when the period starts so if the price of silver hits $30 at some point over the next year (which IMO is well within the compass of normal fluctuation) then they'll claim that they were right. Indeed if it drops to $26 and then recovers to $28 then they'll claim that they're right.