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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: mishedlo who wrote (34962)6/28/2005 3:49:10 PM
From: Canuck Dave  Read Replies (2) of 110194
 
Interesting silver blog. A few other points.

You put a lot of credence in the 200 week MA? The silver "wedge" will probably get resolved sometime in late summer, so we've got lots of time.

I think the expiration of the July contract has had something to do with the extreme commercial short position. It ceases trading tomorrow, I think. The coincidence with the fed meeting can't be ignored either.

I have done a lot of work trying to get the straight goods on silver fundamentals, but I'm as much in the dark as when I started. The only conclusions which seemed relevant were yes, we've run 15 years of deficits, and no, as long as someone was willing to feed the physical market at these levels, silver was going nowhere.

That "someone" now appears to be the Chinese. The US is out of silver stockpiles. I found out that up until the revolution in 1949 that China functioned under a (mostly Mexican mined) silver economy. The Communists confiscated huge amounts of silver which they now seem quite happy to feed to the market in an orderly fashion.

Who knows how much more they've got. Western banks seem ready to lease gold to hold it in check, and China will sell silver. Until one of them runs out or decides to stop.

Until that day, I think charts are pretty much meaningless.

CD
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