Today In Silver

Earlier today, my web server was down but hopefully it is now back. What timing! Here is what I wrote on the main page of SILVERAXIS earlier:

Stupid hosting server has been up and down all day. Silver got crushed today and it was not just the markets at work. Collapsing copper prices set the sentiment but this was simply not normal market action. Heck, gold was up $7 (+1%) while silver was down 60 cents (-5%). No, not normal at all. It was three?steps back in the two-steps forward, one-step back bottoming process for silver. I just hope it wasn’t the beginning of a stumble down a long fllight of stairs.

Now, it truly was copper that put the big pressure on silver early. But the drop from $12.70 down to below $12.20 starting around 11AM EST was pure boolsheet. The only thing that even makes sense is that physical buying was not very strong from the start today, so that when the paper selling began in earnest and overwhelmed the paper buying, there was little left to support the silver price. How do I discern this? By looking at SLV, that’s how. I’ll be able to explain better once the subscription service is up and running, but for now all I will say is that yesterday SLV was trading at a decent premium all day, yet today it traded at a bigger and bigger discount as the silver price crashed. There might be a ray of sunshine, however, as SLV returned to trading at a decent premium by day’s end.

I hope to share my actual “system” for following the SLV (and GLD) premiums and discounts — which are actually one of the basis indicators I follow — at Prof. Fekete’s GSUL session in Canberra, Australia to be held Nov. 11-14, 2008. I am considering, however, sharing the “system” now with those who have already confirmed their attendance at GSUL 5 and who are willing to verbally commit to following through as a “Founding Member” of our subscription service (by actually subscribing when we launch). The “system” isn’t really a trading tool; it is a very simple, rough, manual chart annotation. But I still find it to be one of the most effective sources for analyzing the silver (and to a lesser extent gold) market. Later on, we will hopefully be able to do this same thing in a much more sophisticated, and perhaps real-time, manner, but for now it works just fine.

As for the value of what I’m offering here, I believe this “system” alone is worth the price of the subscription service. So, if I’ve got you curious enough, please e-mail me with a statement that says “Yes, I will definitely be subscribing to your service and I will be attending GSUL 5 in Canberra.” If you are one of the 22 winners of the 2 free subscription contests, then I just need confirmation that you are attending GSUL 5. If you haven’t signed up for Canberra yet, please make sure to let Philip Barton know that I sent you.

More cheap and shameless promotion to come later.

silverax Windbag Wisdom