SD Midweek: After a grueling eleven day standoff between the cartel and silver, one of them is about to make their move. Here’s the details…
Silver has been in sideways consolidation for eleven days:
“Consolidation” is the trading term. It is thrown out there as a teaching moment.
What we are really talking about is the cartel “capping” the price unnaturally, illegally, illegitimately, fraudulently, unethically, and immorally by selling paper silver (that they print up out of thin air) into the market.
In fact, it looks as if the cartel is trying to even push silver under $17 as of this morning at 9:00 a.m. EST in the pre-market action:
Which may not be unlike the action we saw yesterday at an even more illiquid market time:
If you blinked and spent the morning out of the loop, you may not have notice that the cartel came in and dumped thousands of paper silver contracts over the course of one minute at 4:19 a.m. EST to smash the price all the way down to $16.80.
Of course, it didn’t hold, but for now, the cartel is bringing the hammer on the regular to cap price.
So be it: My dollar cost average purchasing of actual physical silver is coming down by the month, and it’s not like the masses are not thoroughly distracted with Bitcoin and the stock market.
The unnatural consolidation can be seen in the now stalled-out gold to silver ratio:
While it looks to be rolling over, and while we know it must roll over, because anything over 75 is not even at the cost to extract the two precious metals from the ground and bring them to market, for now the GSR is at painful elevation near 78 and reflecting the capping of the silver price over the past 11 days.
See how that works? The cartel is showing us, that out of everything in the entire world, and we know, it’s right there on the U.S. Department of Treasury website, that the cartel hates and fears silver the most.
Which is exactly why we stack, and which is exactly why we welcome anybody else who begins stacking.
Sooner or later the strength in numbers and spread-out stacks become too much for the cartel, we will be able to force their hand.
And even if we can’t muster that size of a stack on the whole, China and Russia will force it once the cartel reaches the point where they don’t want to give up any more shiny physical.
Gold has had a better run lately than silver has:
We are well past the first three rally peaks of 2017, and with the dip, and now consolidation, in the yellow metal, it sure does look like the first real test of $1362.40 is coming sooner than later.
Platinum looks set to open nicely above $1000 today:
While we can’t ignore the fact that the RSI is screaming “overbought”, it would be great to see platinum open above $1000 and not fall below it.
That would be bullish. Platinum is showing $1000 is the new support, but it’s not going to be pretty until breaking-out above $1020.
Palladium put in another record high yesterday:
It looks like palladium is consolidating, and even likely, palladium could be setting up to fade lower on the chart to fall back down the the 50-day moving average.
This would be both normal and bullish as seen in the chart above. Palladium has been in a gentle incline for over a year now, with regular tests of the major moving average. There is not much reason to expect different performance to the stable trend.
Copper certainly highlights a set-up to retest the 50-day:
Copper shows the chaotic nature of climbing the proverbial wall of worry. Copper’s retests of the 50-day have been both dramatic and nail-biting, but many analysts are still not looking at copper as having turned and entered a new bull market.
Even if crude is now squarely above $60 a barrel:
As traders and the public in general realize that inflation is making a comeback, the overbought status of crude oil will work itself out in the sideways consolidation just as the price of gas and diesel at the pump is working it’s way up.
Between copper and crude, arguably to of the most used input resources on the planet, prices of everything will become affected from the supply side of the equation in what is called “cost-push” inflation. In other words, when raw materials cost more, the cost of finished goods and services end up costing more.
The dollar will not help out American’s wallets either:
It looks like we are setting up for a bounce, but if the dollar index breaks-down below 90, we could see the greenback dropping either faster.
Recall in mid-2014 the dollar rise and crude oil decline. It happened very quickly, in just a matter of months.
That’s the kind of drop we are talking about. If the dollar starts dropping in a move similarly as dramatic as it rose some four years ago, there would surely be shock-waves that ripple through the financial system and on Main Street.
So far the yield of the 10-year has not made a new high of the “Trump Trade”:
And while the VIX looks to be perky again, we have seen this show several times before:
However, the longer there is no fear in the marketplace, the longer there is little to no uncertainty in the marketplace, and the longer there is no volatility in the marketplace, the closer we are to a trend change ushering in an era of increased fear, much uncertainty, and spiking volatility.
The stock market, however, shows just how long things can go on even when they are irrational:
When we talk about overbought in the metals, it signals to the traders to “sell”. Gold and silver are, afterall, enemies number one of both governments and central banks. But when we talk about “overbought” on something like the Dow, the Fed and President Trump’s baby, well, the yellow highlights speak for themselves and just how long it can go on.
Sooner or later, however, the falling market will become the Fed and President Trump’s baby too, and it will be exactly how they want it, and they will make money and political maneuvers just the same in a falling market.
We’re not privy to when they will make the switch, but for now, nearly everybody is suckered in.
Will that switch be at Dow 30,000? Dow 40,000? Dow 50,000? How about date based, like, say July 20th, 2018?
Finally, after three days of falling Bitcoin:
What happens if it doesn’t get back up this time?
– Half Dollar