Hunt Brothers Silver Market in 1980's and NOW!!!

Hunt brothers Silver market in 1980's and NOW !!!

 

When silver rose to $49.45 per ounce in 1980, the government said that the rise was due to the Hunt brothers "cornering" the silver market. The truth is, silver reached $49.45 in 1980 due to the massive inflation that was created by the U.S. government during the 1970s, and the Hunt brothers were used as a scapegoat. The Hunt brothers were accumulating silver in order to protect themselves from a collapsing U.S. dollar, just like we have been encouraging our members to do in a countless number of articles and videos over the past two years. 

 When the Hunt brothers were accused by the U.S. government of "cornering" the silver market and trying to manipulate silver prices higher, they only owned a concentrated long position of approximately 100 million ounces of silver. JP Morgan today has a concentrated naked short position in silver of approximately 122.5 million ounces, but the U.S. government doesn't seem to have any problem with it. 

 The problem with the Hunt brothers' strategy of accumulating such a large concentrated long position in silver is that after silver prices rose, their position was simply too large for them to ever sell without causing silver prices to crash. With silver reaching $49.45 per ounce in early 1980, the world was about to lose confidence in the U.S. dollar, which would have caused an outbreak of hyperinflation. In a desperate attempt to save the U.S. dollar and prevent hyperinflation, the CBOT raised margin requirements and limited traders' positions to only 3 million ounces of silver futures. The COMEX also limited traders' positions to 10 million ounces of silver futures. Not only that, but the COMEX and CBOT only had a total of 120 million ounces of silver in inventory, and the COMEX was likely going to default from futures contract holders requesting physical delivery. The COMEX was forced to go into "liquidation only" mode, ending all silverfutures contract buying. 

 Combined with the Federal Reserve rapidly rising interest rates, silver prices began to plunge and the Hunt brothers were hit with massive margin calls. On one single day in March of 1980 when the Hunt brothers were forced to liquidate a large part of their position, silver lost 1/3 of its value, declining by over $5 to $10.80 per ounce. That represented a total decline of 78% from its high two months earlier. 

 We are receiving a countless number of emails asking if now is the time to sell silver, and if silver could crash by 78% once again like it did in 1980. The fact is, while the Hunt brothers' 100 million ounce concentrated silver position was on the long side, JP Morgan's 122.5 million ounce concentrated silver position is on the short side.

  While the Hunt brothers' long position was impossible to sell without causing silver prices to crash, JP Morgan's naked short position is impossible to cover without causing silver prices to explode to the upside. Being that the CFTC was so quick in 1980 to support the position limits that were then imposed by the CBOT and COMEX, NIA believes it would only be fair for the CFTC to mandate similar position limits today. This is unlikely to occur because the U.S. government believes JP Morgan's silver manipulation to be a good thing, since it is giving the phony appearance that the U.S. dollar still has purchasing power. The free market will ultimately win in the end and silver prices will soar through the roof to where they belong based on supply and demand fundamentals.

POSTIONAL NICKEL CALL

BUY AND HOLD NICKEL WITH SL 1150 ( CLOSING BASIS) FOR TGT 1200/1215/1230 ++ NOW TRADING AROUND 1171 LVLS... PICK IN DIPS WITH SPECIFIED STOPLOSS..

POSITONAL MCX ADVICE

BUY AND HOLD CRUDE OIL IN EVERY DIPS WITH SL 4880 TGT 5110 ++   NOW TRADING AROUND 4950 LVLS

PICK IN DIPS

COMMODITY ADVICES FOR INTRA ON APRIL 21 2011

TRADING ADVICES ON APRIL 21 2011

BUY COPPER ABOVE 425.50 SL 423.90 TGT 426.50/427.80/429.10/430.40/431.70 +
SELL COPPER BELOW 423.90 SL 425.50 TGT 422.90 / 421.70/420.30/419 --
BUY ZINCMINI ABOVE 104.50 SL 103.70 TGT 105/105.60/106.30/106.90 +
SELL ZINCMINI BELOW 103.70 SL 104.50 TGT 103.20/102.60/102/101.30 --
BUY CRUDEOIL ABOVE 4953 SL 4942 TGT 4960/4969/4978/4986/4995 ++
SELL CRUDEOIL BELOW 4942 SL 4953 TGT 4936/4928/4918/4909 --

WAIT FOR 5 TO 10MTS AFTER MKT OPENING TO TRADE AS PER ABOVE LVLS...


ALL THE BEST...

SILVER FUNDAMENTALS......

Quick Fundamentals on Silver:
In 1900 there were 12 billion oz of silver in the world. By 1990, estimates say that figure had been reduced to around 2.2 billion ounces of silver. Today, that figure has fallen to less than 1 billion ounces in above ground refined silver. It is estimated more than 90% of all the silver that has ever been mined has been consumed by the global photography, technology, medical, defence and electronic industries.
 On current supply/demand trends, the amount of above ground refined silver is projected to shrink to even lower levels in the coming years. Industrial demand has been outstripping mining supply for most of the last 20 years, driving above ground supply to historically low levels. Few in the investment world are aware of this important fact.
 Silver production has been flat in recent years while demand has been increasing. This hasn’t resulted in significantly higher prices yet because the world has been able to fill the gap from inventories and official government stockpiles.
 However, today the U.S. government’s stockpile is all but gone, and sales from other official sources, such as China, Russia and India, are declining, too. The decline in refined silver stocks, from around 2.2 billion ounces in 1990 to around 300 million ounces today means that silver stocks are near an all time low.
 Silver is unusual as its supply is inelastic.
 This means that silver production will not ramp up significantly if the silver price goes up.  Supply didn’t increase significantly in the 1970′s when silver rose more than 35 fold in price – from $1.40/oz in 1971 to a high of nearly $50/oz in 1980. Importantly, silver is a byproduct metal and some 80% of mined silver is a byproduct of base metals. Higher prices for silver will not cause copper, nickel, zinc, lead or other base metal miners to increase their production. In the event of a global stagflationary or deflationary slowdown, demand for base metals would likely fall thus further decreasing the supply of mined silver.
 source : email

MCX TRADING ADVICES ON 19TH APRIL 2011

Intraday trading advices... On april 19 2011

buy copper above 415.30 sl 413.70 tgt 416.30/417.50/418.80
sell copper below 413.70 sl 415.30 tgt 412.70/411.40/410.20/408.90 --

buy zincmini above 104.60 sl 103.60 tgt 105/105.70/106.25
sell zincmini below 103.60 sl 104.60 tgt 101.80 /102.55/103.20

buy crudeoil above 4753 sl 4742 tgt 4760/4768/4777 ++
sell crudeoil below 4742 sl 4753 tgt 4736/4727/4719--

wait for 10 to 15 mts after mkt opening to trade in this lvls...

 

AB = CD PATTERN

Lots of us hear from the technical analysts this term AB=CD and want to know more about it.

AB=CD pattern is one of the most famous harmonic patterns, which can help us to determine when to enter the market or rather when to make the decision of entering short or long positions.

The pattern represents the rhythmic movements for the price using Fibonacci levels. This geometric pattern consists of three consecutive price swings, in other words three price trends.

The pattern requires specific ratios of Fibonacci as explained below.

First: C point must retrace at 61.8% Fibonacci from AB leg or (78.6%).

Second: D point occurs at 127.2% or 161.8% projection of BC leg.

Four important notes:

1) When (C) point retraces to 61.8% the projection will be at 161.8%.

2) When (C) point retraces to 78.6% the projection will be at 127.2%.

3) In rare cases the D point indicates reversal from 100% Fibonacci level and it makes a potential double top or double bottom formation. 

4) CD may equal AB in time.

The images below explain the story of this successful pattern.

Bullish AB=CD

 Bearish AB=CD

Kinds of AB=CD pattern

Classic AB=CD

AB=CD Extension

The technical objective:

Mainly the price retraces 38.2% Fibonacci level of CD leg and the extended targets reside around 61.8% of this leg.

Note that it rarely reaches 161.8% of CD leg.

ADVANCED MCX ADVICE FOR EVENING SESSSION 14-04-2011

BUY COPPER ABOVE 424.20 SL 422.70  TGT 426.50/427.80

SELL COPPER BELOW 422.70 SL 424.20 TGT 420.40/419

PRICE ACTION TRADING........

Swing Highs and Lows
The first thing that we need to recognise is what is a Swing High and Swing Low. This is probably the easiest part of price action and bar counting although the whole process gets easier with practice.

I define a swing high as;
     A three bar combination
     A bar preceded and succeeded by lower highs

I define a swing low as;
     A three bar combination
     A bar preceded and succeeded by higher lows

Market Phases
There are only three ways the market can go;

• Up
• Down
• Sideways

With the swing high/low definition now in mind we can start to build some layers on to the chart to identify these market phases and start to do a simple count of these swing highs and lows.
In short

• The market is going up when price is making higher highs and higher lows
• The market is going down when price is making lower highs and lower lows
• The market is going sideways when price is not making higher highs and higher lows OR lower highs lower lows

This may sound like child's play and a statement of the obvious but you will be surprised at how often people will forget these simple facts. One of the biggest questions I get asked is, which way is the market going? By doing a simple exercise you can see which way that price is going and decide on your trading plan and more importantly timing of a trade.
What do I mean by timing? It may be that you are looking for a shorting opportunity as the overall trend is down but price on your entry time frame is still going up (making HH's & HL's). There is, at this stage, no point in trying to short a rising market until price action start to point down (making LH's & LL's. More on this shortly).

Bias Changes

A Short or Bearish Bias Change occurs when the following sequence develops.

HH>HL>LH>LL>LH The bias change is confirmed when price moves below the las lower low made as highlighted on the chart.

Another way of saying this is 123 reversal and you are trading the pullback as your entry trigger (Red Line).

There are a few variations of this pattern but this is quite simply a price action bias change in its simplest form.

A Long or Bullish Bias Change occurs when the following sequence develops.

LL>LH>HL>HH>HL The bias change is confirmed when price moves above the last higher high made as highlighted on the chart.

Another way of saying this is 123 reversal and you are trading the pullback as your entry trigger (Blue Line).

There are a few variations of this pattern but this is quite simply a price action bias change in its simplest form.

Trending Price Action
After a bias change has been seen and confirmed, one of the phases that the market can then take is to start trending either up or down depending on the bias change previously.
In the chart below we can see what price ideally looks like when price is trending up and trending down. Each phase shows price making HH's & HL's on its way up and LH's & LL's on its way down.

Ranging Price action
Now this is where the chart can become interesting. By using the price action counting of the swing highs and lows we can know at a very early stage IFprice is going to start to develop range bound activity.

• Price is not making new highs OR new lows

I don't mean all time highs/lows or new day/week/month highs/lows... just simply a new chart swing high or low. Price will start to stall and not make a new swing high/low and typically will stay contained within the last swing high and low that was made on the chart. Isn't that a simple definition?

Range rule definitions

• Price doesn't make a new high or low on the move
• If price stays contained within the last swing high and swing low to be made, price will remain range bound until it makes news move highs or lows.
• Price confirms the range when a lower high and a higher low is made within the previous swing high and low.

In the chart below you can see that from the left side of the chart price is making LH's & LL's all the way to the first blue arrow which in real time would be the latest lowest low. Price then moves higher to make a HH. These two swing levels have been highlighted.
At the point of the chart, in real time, price needs to either start moving higher past the last swing high (red Arrow) making a new high OR move lower past the last swing low (blue arrow) making a new low. Until either of those things happens price will most likely remain range bound. In this example that is what happened.

Range considerations
Some considerations for identifying ranges at an early stage in real time are;

• That price could be creating a pullback or bias change and as the chart unfolds for you a new high or low could be made voiding the potential range.
• There are several definitions of a range one of the more common ones is that you are looking for a double touch of support and resistance. For me this is a little too late in the game as price may not create the double touch as in the example above. With this price action method you can identify the possibility of a range developing VERY early without having to worry IF price does or does not give you the double touch. As you can see with that definition you would interpret that price is not range bound at all but, you can clearly see visually that price is moving sideways without any definition.

What you should have learnt from this short article A simple rule defined method to identify swing highs and lows How to use this swing high/low definition to interpret price action market phases How to identify a bias change How to identify trending price action How to identify Range bound price action Bias Change pattern variation In the below images we can see the pattern variation and compare them to the outlined pattern above.  The only main difference is that you are looking for a breach of a previous swing high or low as the first qualifier to indicate a potential bias change.

Acronyms used

• HH - Higher High
• HL - Higher Low
• LH - Lower High
• LL - Lower Low

 By Philip Newton

POSITIONAL ZINC ADVICE

POSITIONAL ZINC/ZINCMINI CALL.. BUY WITH SL XXXX FOR TGT 119.80/121 ++  

POSITONAL COMOIDTY CALL

SELL COPPER ON EVERY RISE WITH SL 437 FOR ULTIMATE TGTS 408/397

POSTIONAL CALLS FOR APRIL........

BUY RADICO WITH SL 129 FOR TGT 146/149 ++ CMP 136.25

BUY ICSA WITH SL 115 FOR TGT 140 CMP 125

BUY KGL WITH SL 10 FOR TGT 19/20 ++ CMP 14.60

BUY KSK WITH SL 99.80 FOR TGT 126/130 ++ CMP 107.65

BUY RENUKA WITH SL 68 FOR TGT 86/90 ++ CMP 76

BEFORE ENTERING INTO TRADES CONSIDER RISK.......

AND CMP IS EOD VALUE..... PICK IN DIPS... OR AT SPECIFIED LVLS.... OR ONE PICK ABOVE AT CMP VALUE ALSO BASED ON THEIR RISK APETITE......