When Is the correction

Trend is your friend! Sure there is always some consolidation, unless you got the trading computers, keep it in! Why is silver a good purchase, well the potential for massive inflation. The Fed just announced qe2, and looking at next year's potential budget shortfall, you can bet your ass there will be a qe3!

Here is the deal with these trading programs, most are probably familiar with them. Short ( most likely naked ), cover, short, cover, short, cover, accumulate, trigger the run up, and sell all the shares you just accumulated to the people who have to climb over one another because you were thinking it was going lower, trigger the next consolidation, with more massive shorting, collapse the stock with massive naked shorting, if the interest has dried up, or rinse and repeat the previous strategy if the stock has more room to go. Trading computers can create patterns, triggers, fake outs, you name it. Like I said the game is rigged and unless you own the programs that are doing this, which very few people do, enjoy the trend, project the prices you want to buy and sell at, and be disciplined, and enjoy the profits, silver has a ways to go!
 
I think there will be some profit taking before thanksgiving like last year. However with QE2 and the Europe battling an Irish default i cant see it lasting too long.


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I'm ready for a correction. $28 already. That's a little ridiculous even for silver ;)
 
To those who said that the upward move IS the correction- I believe you to be correct.

AED's first post on the first page is basically where I stand.
 
Austrian Econ Disciple said:
What policies have you seen that would result in a correction of more than 2$? All I have to do is point to Helicopter Ben. :p
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A correction wouldn't be a response to a policy. It would be a response to the change in price that has already happened being too much too fast. A correction of >10% would not be at all surprising to me, given what silver has been doing lately. Nor would it be a long term bearish sign. It would just a be a breather. And as prices go up into the future, you can expect to see that kind of thing happen from time to time. Even if it does go to $60/ounce by the end of 2011, like you say, it won't do it without some corrections along the way, some of which will be sizable.
 
Gold is way above its old time high of around 850 an oz back in 1980. Silver has to go above 50 to do what gold has already done. Maybe this is catch up time....
 
erowe1 said:
A correction wouldn't be a response to a policy. It would be a response to the change in price that has already happened being too much too fast. A correction of >10% would not be at all surprising to me, given what silver has been doing lately. Nor would it be a long term bearish sign. It would just a be a breather. And as prices go up into the future, you can expect to see that kind of thing happen from time to time. Even if it does go to $60/ounce by the end of 2011, like you say, it won't do it without some corrections along the way, some of which will be sizable.
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You would have to believe that silver is over-valued, and not under-valued to come to that conclusion. It is my belief and many others that silver is under-valued, and thus the rise in its price is a reflection (correction) of a trend to head for that ever elusive 'equilibrium' price that one will never reach. In other words -- do not expect silver to go down over 10%. Silver hinges like Gold on Governmental policy. Sure, there is some pressure through industrial demands and other side-purposes, but silver like gold is the lens of the market reflecting the horrendous fundamentals of the economy and the flailing status of the dollar. As long as Heli Ben is around you better not expect a drop in price or you will be waiting and waiting and ask yourself why you didn't buy when it was lower.

I do expect minor corrections and sell-offs though. This shouldn't reflect a drop of more than 6% though. The fundamentals give no reason to expect any more than 6%.
 
Austrian Econ Disciple said:
You would have to believe that silver is over-valued, and not under-valued to come to that conclusion. It is my belief and many others that silver is under-valued, and thus the rise in its price is a reflection (correction) of a trend to head for that ever elusive 'equilibrium' price that one will never reach. In other words -- do not expect silver to go down over 10%. Silver hinges like Gold on Governmental policy. Sure, there is some pressure through industrial demands and other side-purposes, but silver like gold is the lens of the market reflecting the horrendous fundamentals of the economy and the flailing status of the dollar. As long as Heli Ben is around you better not expect a drop in price or you will be waiting and waiting and ask yourself why you didn't buy when it was lower.

I do expect minor corrections and sell-offs though. This shouldn't reflect a drop of more than 6% though. The fundamentals give no reason to expect any more than 6%.
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I agree when it gets north of 50 I may re-evaluate.. For now I am not worried as it is doing what I expected when I started buying in 2000.. Just ride the bull
 
Austrian Econ Disciple said:
You would have to believe that silver is over-valued, and not under-valued to come to that conclusion.
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No you wouldn't.

Take your prediction that it will hit $60/ounce by the end of 2011. For it to do that it would have to go up an average of 1.3%/week between now and then. But some weeks it will go up much faster than that. For example, over the past week it's gone up around 15%. In order for both of these things to happen, there have to be corrections along the way.
 
erowe1 said:
No you wouldn't.

Take your prediction that it will hit $60/ounce by the end of 2011. For it to do that it would have to go up an average of 1.3%/week between now and then. But some weeks it will go up much faster than that. For example, over the past week it's gone up around 15%. In order for both of these things to happen, there have to be corrections along the way.
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It could be much higher than 60$ for all I know. All I know is what I see coming from the Government, what politicians are in power, what business interests are still at the forefront, who is the Chairman of the Fed, and the accounting books of the US make it all, but enivitable for a sizable valuation gain because of the precipitous fall of the dollar. The debt-ceiling is going to get raised, we will still have hundreds of billions of dollars in deficits, the Fed is unable to raise interest rates until they monetize the debt (though at that point it is pointless to raise rates -- it'll be too late), among a myriad of other factors all point to a great rise in silver.

Given the state of our economy and the unavoidable future, it is certain that silver is under-valued. Of course there will be small corrections, no one is not saying that. There will be those trying to the get the maximum profit out of the market. I wouldn't ever expect anything like you are though. To be honest I wouldn't be surprised if silver hit 60$ by July next year.
 
In Nov., 2009, silver hit $19/ounce. In February of this year is was down to $15.ounce. That's over a 20% correction. I doubt that it was due to a shift in government policy that led people to believe they'd stop printing dollars.

Of course, over the past 9 months, that 20% correction has been more than erased. But those things happen.
 
erowe1 said:
A 10% correction would be a small correction.
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Well small is subjective. A 10% correction given the fundamentals and state of the economy is not small. It is quite large. 4-6% is more reasonable figure. Short-margins are going to be tight, very tight.
 
erowe1 said:
In Nov., 2009, silver hit $19/ounce. In February of this year is was down to $15.ounce. That's over a 20% correction. I doubt that it was due to a shift in government policy that led people to believe they'd stop printing dollars.

Of course, over the past 9 months, that 20% correction has been more than erased. But those things happen.
Click to expand...

JP Morgan and HSBC were heavily involved in suppressing the value. However, GATA, CFTC, etc. are at least taking the glasses off some of the market players and their tricks of the trade. Given they are in the spotlight now, suppression of the value of silver is a lot harder. Lots of things have changed since then, it is a poor methodological evaluation to transpose 2009 to the end of 2010.
 
I am willing to eat crow. I could just as easily be wrong after all, no one has perfect knowledge (nor control over the actions of another), but I will be highly surprised if we see silver back down to 26$.
 
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