Manipulating the Silver Market

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"Everything remains in place for an upside explosion in silver."

To manipulate the price you would use your buying power and accumulate long positions until you force silver above resistance in the high $18.40s and, thereby, trigger all the buy-stops sitting there, including the one we placed. You would then sell your long positions into those buy-stops and keep selling until (1) you became short; and (2) your selling drove prices lower.

I've just described exactly what's taken place in silver. We've seen a classic textbook case of market manipulation. We have seen it so many times before, I warned on 18 August: "Let's see if silver can hold this level, particularly with option expiry coming soon."

I expect we will see the rest of this repetitive manipulation pattern play out over the next few days until this month's options expire and that silver will remain under $18 during this period.

There may, in fact, be another bout of selling pressure by the shorts to shake out some more weak-hands. It would give the manipulators an even bigger profit when they buy back on even lower prices the short positions they established on the break out above $18.40. Consequently, I will not be surprised if the 2-year uptrend line in the following chart is broken this week.

silver manipulation

I don't think that uptrend line will be broken, but don't panic if it is. And don't be distracted from the big picture—both technical and fundamental. Technically, silver has nearly completed a huge accumulation pattern, and the 'head-and-shoulders' pattern in the above chart is far more important than the 2-year uptrend line. Silver is approaching an important upside breakout, which I've been anticipating for months.

The fundamental picture for silver is just as bullish. Everything remains in place for an upside explosion in silver. Be ready for that breakout by not losing sight of the big picture.

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