Tuesday, May 03, 2011

Silver Raid Unimpressive Thus Far

Navy Seals tap an Islamic mass murderer; large brokerages sending out special notes to their most “favored” clients saying sell commods (after taking house positions to benefit?  Is that too cynical?), … Canadians pull the right levers (mostly) in the ballot boxes across the Great White North, and May has indeed arrived on schedule, as it does each year about this time.  

Just below is a short-term chart of the largest silver ETF with a few embedded comments.  

If the image is too small or is cutoff, click on it toward the top of the chart for a larger view.

Believe it or not, we expected a harsher sell-down for silver than we have seen so far.  We expected a rip-roaring “plunger” such as we saw in 2004 (April/May -35.9%), in 2006 (May/June -37.7%) or in pre-crash 2008 (March/April -24%), we are omitting the 60.8% silver plunge from July to October as being extraordinary, but so far nothing like those huge percentage cliff dives for the second most popular precious metal. 

So far the most we can say that silver has corrected this harsh-correction trip is a bit less than 15% ($49.75 to $42.45).  Of course nearly all of that plunge occurred in uber-light liquidity Asian trading late Sunday evening on a day that the U.K. was out of action.  Does that even count?  

Well, yes, it counts.  Raids always count – if they “stick.”    

Perhaps the tight physical situation for commercial sized bars might result in a higher base than we imagined.  We’ll see, meanwhile it’s helter-skelter in the metals at the moment. Stay tuned. 

Bargain Hunting Season is apparently off to an early start in 2011, as expected.  

That is all for now, but there is more to come.    


The Original
Vulture Speculator

Trading gold, silver and mining shares since 1980 with a focus on taking advantage of volatility extremes, Gene Arensberg analyses the markets through a basket of technical and fundamental indicators and shares his findings from time to time here at Got Gold Report. Mr. Arensberg has been quoted in the Wall Street Journal, Dow Jones MarketWatch, USA Today and dozens of other news organizations.

"I've been a huge fan of Gene and his amazing work for years..."

Brien Lundin, CEO, Jefferson Financial, Host of the annual New Orleans Investment Conference and Publisher of Gold Newsletter

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