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Silver - Futures Irrelvant? Physical Market Is Not.

Tuesday Evening  22 November 2011

 We are of the mind that the futures market has become less
relevant  as a barometer, subject to outright manipulation as
certain participants have been caught short and have been doing
everything possible to stem their naked short exposure. Of course,
when said participants are not required to post any margin, there
are no margin calls.  What happens to the average speculators, by
contrast, who have been long and not only responsible for posting
margin, but have been driven from the market by several margin
increases?  Is the difference between the opposite sides of the
market not obvious in how the CME & CFTC favors one side over
the other? 

 Ask Gerald Celente what he thinks of the "regulated" futures
market and his "stolen" account at the now defunct MF Global. 
He has his own interpretation of what the "MF" stands for.  He is
not alone amidst thousands of other MF Global customers got
screwed, for lack of a better expression.  Where was the CME
to prevent the debacle from happening?  Where was the CFTC
since it began.  Where is Washington DC in this matter.  The CME
has been mute.  Sorry MF Global customers...you are on your own.  
The CFTC?  Well, that lapdog organization has been discounted
for years, a mere shell for any public that still may believe in it. 
Jon Corzine, a favored political hack that will not be touched by
the DC clan.  If anyone thinks there is no manipulation in this
market, [and others], well these events are mere coincidence,
and the tooth fairy is alive and well.

 That said, it gives background on why it is so difficult to see any
reliability in the futures market.  What is the most important factor
in the precious metals is the "invisible" cash market.  You see
[forced] liquidation in the futures market, but the physical market
is NOT so threatened nor susceptible to manufactured price moves. 
There are no margin calls; there is no massive forced liquidation. 
In fact, quite the opposite.  The lower prices continue to provide
great buying opportunities at favorable prices, something we have
been advocating for many months, now.  [Silver - Keep Buying
The Physical
, article from 1 June 2011, as an example.  Full article
not available.]

 And that all said, let us go to the charts, just for drill.


 Ostensibly, with this month being another inside bar, [lower high
and higher low relative to the preceding one], there is not a whole
lot to say, but as a market analyst, it is hard not to have a point of
view.  We start with the third bar from the end, the widest down bar
in recent times.  So far, the rally attempt to go higher has been
weak.  Of course, with the forced exit of many speculators, few
are left to move this market higher, second bar from the end. That
leaves the current month.  The open on 1 November was 34.19,
near the higher end of the range, so we can say thee has been
more effort to go lower, since, and that effort has not been very
successful, an editorial rationalization.

 SIZ M 22 Nov 11

 A look at the more detailed weekly chart does little to clarify the
picture, echoing the weak rally attempt, BUT, looking for the
proverbial silver lining, when price rallied 5 weeks ago, out of the
small trading range that had stopped the decline, the market has
since taken 4 weeks to correct that rally.  For now, we are also
seeing a potential higher low, but that needs confirmation to be valid.

 SIZ W 22 Nov 11

 Finally, the daily.  The wide range decline bar, down from 34, is
attributable to Singapore increasing their margin rates for silver,
as was done in the United States, forcing smaller longs out of the
market.  As an aside, the net effect of these "institutionalized"
forced moves actually strengthen the metals market.  There is no
place else to go, after the futures, and the physical holders ain't
about to let go of their holdings, impervious to margin calls.  We
have refrained from commenting on the insanity that the world
central bankers, [hyenas], and the havoc they are creating in a
world-wide panic to try and correct the lunacy of their years of
control, doomed to failure.  The point is, the physical market will
prevail and payoff big!

 Since that last decline, five days ago, the bars have been
overlapping.  Whenever you see this kind of activity, it is a struggle,
or balance, between the forces of supply and demand.  Note that
volume has been the highest since the beginning of October...an
increase in effort, if you will....and the results?  Well, as of today,
price has not dropped any lower, and Tuesday's close was above
the volume effort of the previous two days, so the battle edge goes
to the bulls when the bears are supposed to be in total control. 
One more observation...we now have a higher low, an added plus.

 It is hard to say we have no bias in this market, but this has been
an effort to look at the "factual" observations of recent price activity,
and draw some conclusions.  Whether they are right or not is less
important because, as we have been saying all along, both silver
and gold are going higher.

 Keep buying the physical, and only what you can hold personally. 
Keep Gerald Celente in mind for those who want to trade futures
and/or ETFs.  There is far more risk there than meets the eye. The
regulated powers that be takes no prisoners, in the process of
taking all the gold and silver they can "steal."

SIZ D 22 Nov 11