an article to
-
Font Size:
-
Print
- TweetThis
Using SLV as the proxy for the price of silver, on Friday, March 27th, 2009, for the first time since August 25th, 2008, the 50 day moving average of SLV crossed above the 200 day MA, a formation known by technical analysts as the “golden cross”. SLV closed that day at $13.15.
Since then the spread between the 50 day MA and the 200 day MA has widened every day, a bullish sign.
Recently the price of SLV has been oscillating around the 200 day MA, crossing above it on March 5th, March 13th, and March 19th, where it stayed for two weeks until dropping below it on Friday, April 3rd.
On March 31st, SLV dropped below the 50 day MA for the first time since December 9th, 2008.
How to interpret this technical data? Crossing below the 50 day MA and 200 day MA could be considered bearish for SLV. But the 200 day MA is still sloping gently downward, and the 50 day MA is still sloping steeply upward, and the spread between the two is still widening. Unless this trend changes, the 200 day MA will be leveling off at about $12.50 and may begin to rise.
SLV closed last Friday, April 3rd at $12.60
With the 50 day MA still sloping sharply upwards, SLV looks poised for a bounce off the 200 day MA in a continuation of its upward trend since the big November bottom. SLV hasn’t closed below $12.50 since February 4th, and appears to be setting a floor there. It looks like a limit buy order now between $12.00 and $12.50 will result in an excellent entry point for longer term investors.
But what about the short term? Let’s look at the 12 day EMA and 26 day EMA.
SLV has had a very nice runup from $10.45, its lowest closing price so far this year on January 14th, to $14.34, its highest closing price of the year on Feb 23rd, a gain of 37.2% in less than six weeks.
The closing price stayed above both the 12 day EMA and 26 day EMA every day from January 16th to February 25th when it fell below the 12 day EMA and February 27th when it fell below the 26 day EMA.
Since then it has oscillated around both EMA’s until crossing below both on March 30th.
SLV’s price is now nearly 3% below the 26 day EMA, for the first time since March 10th.
What happened that day? It was the biggest market rally of the year and one of the biggest moves on the S&P 500 of all time, a 6% gain in a single day.
It appears that SLV was being unloaded that day in favor of more risky stocks.
If you had bought SLV at the closing price of $12.45 on March 10th, 2009, you could have made a gain of 5% by the close on March 13th, or a gain of 9% by the close on March 20th, not bad for just 8 trading days.
Previously, when was the last time SLV fell 3% below the 26 day EMA?
On December 1st, 2008, one of the scariest market days in recent history, when the S&P 500 fell by 9.7%, and SLV remained more than 3% below the 26 day EMA on December 2nd as well.
If you had bought SLV at the closing price of $9.18 on December 1st, 2008, you could have made a gain of 11% by the close on December 11th, or a gain of 23% by the close on December 17th.
When was the last time before that? On November 11th through November 20th, 2008, as the S&P 500 fell by 23% in eight trading sessions, and reached its lowest point in 12 years. Both of these time periods in November and December saw some of the highest selling breadth in market history. Investors were panic selling everything, not just SLV.
If you had bought SLV at the closing price of $8.86 on November 20th, 2008, you could have made a gain of 17.7% by the close on November 24th, in just two trading days, or a one month gain of 27.4% by the close on December 17th.
Now that SLV is again trading 3% below the 26 day EMA, it looks like a great buy for both the short term trader and long term investor in the $12.00 to $12.60 range.
In closing, let’s look at the possible effects of manipulation on the recent price of silver, which I discussed in my previous article.
Long term silver prices have been depressed by market manipulation for many years despite strong fundamentals, yet have been steadily climbing since 2000 despite all the manipulation. What might be some short term reasons that insiders in power would want to suppress silver prices over the last month?
On March 20th, 2009 SLV closed at $13.69, the highest close since February 24th. The following trading day, on March 23rd, 2009, Tim Geithner announced his new PPIF plan to the general public, to buy so called “toxic assets” using government sponsorship of private hedge funds. Of course it would not have looked good for silver prices to increase on that day (since it might make the dollar look weak), and the price of silver has been declining ever since as the treasury secretary continues to sell his pet program to congress and the general public. SLV’s share price has been declining ever since, closing at $12.60 last Friday.
Also, our president has been in the public eye every day since he left for the G20 summit in London on March 31st. It would not look good for the dollar price of precious metals to increase during that span of time.
GLD, the proxy for gold prices, has also been declining steadily since March 20th, when it closed at $93.59, 2.4% above its 26 day EMA. On Friday April 3, it closed at $87.59, 3.7% below its 26 day EMA. It would not look good for the dollar gold price to be rising when our president was conferring with world leaders whose countrymen buy our treasury bonds and other dollar denominated assets.
XLF, the proxy for big banks and the financial sector in general, has rallied 19% since the March 20th close, even though it had just rallied 30% since the March 9th market bottom.
SPY, the proxy for the overall US stock market, has rallied 10% since March 20th close, even though it had just rallied 12.6% since the March 9th market bottom.
This looks to me like financials have been being bought by insiders, in an attempt to manipulate public opinion in favor of the Geithner PPIF plan, and to support President Obama as he appeared on the world stage, pulling the S&P 500 up along with it.
But I doubt that these insiders would want to hold stocks in the incredibly weak financial sector any longer than necessary, and now they will begin to unload, making SKF a great buy right now near its one year lows. For the next few weeks, selling or shorting banks should be a good trade, especially the weaker banks such as BAC, C, and JPM.
The above chart shows that the USDX, the dollar index weighted against a basket of foreign currencies, had been plunging rapidly since March 10 immediately after the recent market trough. It dropped again on March 23rd, the day of Geithner’s PPIF announcement, and then made steady gains until March 30th, but has been declining steadily ever since.
Interesting that the immediate market response was to dump the dollar, and that the insiders were apparently unable to defend the dollar and stop the decline of the USDX on the first day that the PPIF was announced. The USDX decline accelerated over the last few days while the president has been making public appearances in Europe. The March plunge in the USDX is considered quite large for a currency, which are usually slow moving, and took the dollar index from well above the 50 day MA to well below it.
Disclosure: Long SKF.
Related Articles
|
-
The Seeking Alpha 100
See allThe top 100 stock
market authors
selected for publication
Seeking Alpha 100 » -
Fastest Climbers
Authors with the largestSee all
increase in followers
in the last 7 days
Fastest Climbers » -
Top Commenters
Top commenters,See all
as ranked by their peers
Top Commenters » -
Top Instabloggers
The 100 most active
Instabloggers.-
1
David Fry
-
2
TraderMark
-
3
Don Dion
-
4
Cliff Wachtel
-
5
Joseph L. Sha...
Top Instabloggers » -
1
-
Top StockTalkers
TopSee all
StockTalkers.
Top StockTalkers »
As a matter of Fact, Mr. Goodman is such a proponent of Manipulation by "Insiders" that he has written an Article on it. I asked Him for proof, so far he has not provided any.
Another commentator told him to report his findings to the SEC. He rejected that idea outright.
So, please direct your query to Mr. Goodman. I have not been able to uncover His source, maybe you will be able to do so.
My "coherent" reply?
Mr. Goodman made this and other assertions and continues to do so in Article after Article.
When queried for proof, he asks to be proved wrong. Since I haven't made any claims, Ask Mr. Goodman.
Is that "coherent" enough for you.
Please post your question to the proper party.
On Apr 07 12:51 PM Conan the Barbarian wrote:
<<< Speedspirit felt that the Article gave Trading Info. Somehow he was mislead. >>>
Paul -
Isn't this trading info?
<<<Now that SLV is again trading 3% below the 26 day EMA, it looks like a great buy for both the short term trader and long term investor in the $12.00 to $12.60 range.>>>
I'm not here to provide entry and exit points for you to make trades.
You can always get a pay service for that. If you want to dispute this trading info and provide alternate trades, I would be interested to hear your opinion, with supporting facts, of course.
Please read my articles more carefully and try to stay on point.
As for proof of market manipulation, did I ever state that I could prove it? Or that anyone could?
Obviously the PPT and hedge funds are completely non-transparent, so I just submit suspicious trading patterns to the readers as circumstantial evidence to make their own determination whether it is manipulation or not.
As for reporting my knowledge to the SEC of manipulation in one particular stock, many others with more specific knowledge than I had already reported it. Why should I waste my time reporting to an organization that has proved itself worthless since inception in 1934?
If you think that you can disprove ANY of the facts I present, or want to dispute ANY of my analysis with valid, factual analysis of your own, I would be MORE than glad to respond.
By the way, the past tense of "mislead" is "misled".
"No need for exit strategy. It is a hold for many years".
Trading implies "in and out". As far as you are concerned, there is no "exit".
I'm sorry that you now find it necessary to continue your posturing.
I repeat, Prove Manipulation. YOU, not someone else from the GATA .
You see what you have done, I now have a whole series of Articles to Read, Jake Towne's.
We maintain a short position on GLD and recently shorted silver via ZSL - ridingthegravytrain.bl... being a
Take the misinformed misanthrope, not a historical fact in there about the Hunts or when it occurred.
Jake Towne was brought in by Harold to push me around. I do not mind at all. I welcome the discourse. But having failed, Jake is gone.
"tit for tat"(sorry), I plan to scrutinize every one of his articles for "cases of factual manipulation".
Hell, every one of my purchases or sales (according to the broad guidelines I've seen)manipulates the market, one share or 100, no difference especially if I do it in the "Last Hour".
IMHO
Meanwhile, neither Jake nor Harold will provide verifiable data supporting their Manipulation suppositions. They will quote other Articles by other people and numerous websites none of which will provide concrete evidence either.
"But there's smoke, there has to be a fire!"
IMHO
Especially in a piece making heavy use of technical analysis (and conspiracy theory). There should ALWAYS be an exit strategy.
What if you're right over the next 20 years but SLV goes to 3 before going to 50? Now you're going to come back with another no-no of investing: "this can't possibly happen". It's up there with: "it's different this time" or "you can't lose with this strategy" or "this indicator has never failed".
I could go on and on with this (and might very well come back later to add more stuff) but I gotta go check my charts.
On Apr 06 01:37 PM Harold Goodman wrote:
> I stand by everything I wrote. SLV below 12 is just a better entry
> point, a better value. No need for exit strategy, it is a hold for
> many years. Short term exit is determined by your own greed.
>
> You doubt that silver is being manipulated? Read Ted Butler and
> refute any of his arguments here on SA. I will be waiting.
>
>
> <<<Harold keeps trying to fit everything into
He was trying to get help in proving a theory.
Why don't you help him.
At first I was a little put off by your insistence. But in the end I greatly appreciate your tenacity. A lack of integrity or disinformation should never be tolerated. Which is why the blogosphere continues to overtake the mainstream media.
Yet some people still believe they can talk their way out of, what they behave their way into!!
Thanks Conan.
On Apr 08 11:47 AM Conan the Barbarian wrote:
> Goodman: Jake says that there's no verifiable proof.
>
> He was trying to get help in proving a theory.
> Why don't you help him.
My response to Kelm got the ball rolling. Harold has a tendency to...be nice...overstate his knowledge of Manipulation, he has no proof but claims it exists and points at others as the verification of his views.
Jake on the other hand is a true believer who wants to find proof. You want help, I'll try to help.
I have warned Jake about what Harold is doing. Have to see how that plays out.
Like I said to Kelm, Harold does have interesting info too bad he finds it necessary to involve manipulation, suppression and cloak a buy/hold recommendation under a trading guise.
Ingots come in all sorts of sizes. Sell an ETF, you have to wait for settlement.
A few EMPs set off in various locations. "You think you own what? We don't have any such records."
Proof? Proof? Proof? I'll give you proof.
When in your very last moment of life you will ask is there a God and will I go see him. And that being agreed on then you there have the ansewer to the greatest question on Earth. And yes there is a God and with that you have a opposing force. And that opposing force has always been here and it patiently has waited to control the world markets. Proof? Look where we are today. A place manifested so rapidly people are still confused. A place the experts said we couldnt go. Too big to fail.
Now we can remain blind to the obvious as a matter of our own ego but that there will keep those from having done the proper research to make an informed investment that the society of the elite manipulate everything.
finance.yahoo.com
/echarts?s=SLV#chart6:...
I'm with Gartman, COPPER is the leader now for most informed metal bulls.
finance.yahoo.com/echa...;range=1y;indicator=sm...
"Needed" for what? Do you think Home Depot and McDonald's will start accepting silver bars at the checkouts if there's terrorism, a spike in oil, a plunging dollar, or acts of God?
When has there *not* been all of the above the decade leading up to 2007, and what did the markets do? And where were the stock markets 3 months after 9/11, or 6 years after?
ETFs certainly do not = real silver or gold, we can agree on that.
Hyperfinlation might result in the only scenario in which you could walk around safely with silver and gold *and* also spend it freely, but currently there's nothing but deflation on the horizon and soon enough gold < $700 and silver < $10 at the minimum so as far as exit strategies go that's where we'll consider exiting our shorts.
On Apr 08 08:32 PM Bill S. Friend wrote:
> I buy physical silver. All the market manipulations have many unintended
> consequences and the "all in" attitude the government displays is
> frightening. I think a twenty percent silver position is prudent
> and I may increase that stake. Good luck redeeming your silver from
> an ETF if its really needed. Possible scenarios include: terrorism,
> a huge spike in oil prices, plunging dollar, or acts of God. All
> of which have happened recently except for the dollar devaluation...
>