Wednesday, May 25, 2011

The Takedown, part 3?

10:55 pm (Hawaii) Just when things looked so promising for Spot Silver, we have this. It looks like yet another takedown by the puppet masters. Just as the price hit 38.75, it got mauled down to 37.57. Looks like there was some fighting by bulls along the way, but when it's this one-sided, there can be only one reason. Price is now lower than it was when afterhours trading ended stateside earlier today (Wednesday).

Just another 30 minutes or so before Hong Kong closes shop. London and Globex took Spot Silver higher the past two days overnight. But it hadn't been knocked senseless like this in those instances. Could the CME really announce another margin hike requirement in the morning? I can't say I would be shocked. But with all the brouhaha in London over JP Morgan and manipulation of price in the LME, any puppetry (paper silver manipulation, lies about physical silver in the Comex vaults, etc.) would be at least a bit surprising.

Update 11:03 pm (Hawaii) Holy crap it just got worse. Back to vertical crashes by the CME Mafia. Guess I should've taken my silver play profits when I had the chance. Nothing I can do here but watch a dvr, read a book and go to sleep. They can't keep silver down forever and they know it. I'll be patient.

Update 11:08 pm (Hawaii) Gold getting beaten down, as well. The earlier margin hike abuses (five hikes in nine days) scared off plenty of speculators. Then Spot Silver moved from 32.20 to 39+ before dropping again. What happens this time? If buyers can't push Spot Silver back up, will the price just melt and dissolve back to the low 30s? Or worse? 

I could've avoided the risk by cashing out earlier, or by learning how to buy puts. But it's too late now. If the price keeps getting brutalized when peon premarket trading starts in less than 3 hours, I'll get some ZSL and hedge myself for the bumpy ride. It's a good thing I'm 60% cash. If they take it below 35, below 33, even below 30, I'm ready for more physical. 

Update 11:24 pm (Hawaii) Spot Silver finally bounces a tiny bit. Gotta hand it to the CME. If they really felt like it, they could take it to 30 overnight. That would probably be too obvious and blatant, even by their standards. They could be doing this to 1) ease buying pressure, 2) create better physical buying opportunities for its vault, 3) counter China's new gold futures instrument in Hong Kong, 4) send a message to China regarding its coming silver futures instrument. 

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