www.silverdoctors.com
Source: William Banzai7
On last week’s show, Doc and I talked about the
importance of the 200 day moving averages in gold and silver. We knew
that crossing them in the near-term was a given, and that that would
send more “paper boys” chasing after GLD and contracts at the COMEX.
Sure enough, that has played a role in the trading action we’ve seen
this week.
We discuss this action with Craig, attempting to demonstrate when and
where technical analysis can in fact be very useful and complimentary
to other market analysis tools. Lots of money around the world is
managed by people making use of these tools and the cartel also exploits
“expectations” set by technical analysis.
It’s refreshing to see precious metals prices rise. But as we
discussed with Craig, it would not be surprising to see a pullback in
the very near future. We recorded on Thursday. Now that the Friday close is in the rear-view mirror, we see the decline of just over 3% for the GDX mining share ETF and silver’s slight lag to Friday’s gold trading fits a typical pattern when upside momentum slows and the cartel is getting ready to push prices lower. Monday’s
trading action should be interesting. I expect we will see a small
capping effort early next week, but that we will close the week without
much change for the week.
It’s important to step back a bit and take in the bigger picture. It
was only a couple of months ago we were staring at total COMEX silver
open interest in excess of 200,000 contracts, a nose bleed high level
that presumably was indirectly linked to ever increasing short interest
created and dumped into the market to suppress silver. The good news is
that we are far off those levels; as silver has recovered off the
sub-$14 dive, the cartel was forced by tight physical market conditions
to conduct a “managed retreat” and cover some of their paper shorts.
But in the very short-term, that’s also bad news because the cartel has
more room to add on fresh short interest. This is what I expect we’ll
see early next week – a short pause in the bull market run.
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