Wednesday, July 4, 2012
Silver Canary in the Forex Mine
As Forex Traders, we are always looking for exceptional opportunities to profit on with which to constantly grow our accounts and asset column of our balance sheets. If you've attended our online trade room, you've surely heard various discussions regarding some of the most hotly traded commodities and on good grounds. For instance, Silver's latest COT(Commitment of Traders) CFTC release, dated June 26, 2012, confirms silver's speculative positions at some of the lowest levels not seen since 2003. If you've been watching these markets for the past number of years, you'll be familiar with who had what speculative positions and why they've closed them rather recently. Silver is one of the most heavily traded commodities and is it just a simple coincidence that Bear Stearns went belly up the exact same day Silver hit a multi decade high back in March 2008? I don't think so.
Please take a look at the attached 10 year chart of Silver and identify which trend lines start to converge around election time later this year. Think about Silver in 2003, where was its price action at? Now, what repercussions will the LIE-bor-gate scandal have on credit markets? What does JP Morgan's $9 Billion Loss mean for regulators? Will the FDIC quasi-re-monetize Gold as a 0% Risk weighted asset under some new collateral rules? Will the Fed be forced to do QE3 in the near future once Europe's Bailout High wears off? Will Germany demand Gold as collateral for its participation in the Euro Redemption Fund? I'm not sure what may happen in any of these situations, but I do know one thing. My Forex account will grow then so will my physical silver count. I'm looking for continued Risk/Euro off in the market with large retracements up until we have further Central Bank Intervention. Fun times my friends.. Fun times..
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