Loading ...Yes in ‘normal’ market conditions this is the case. However we do not have normal markets anymore. In fact we don’t have markets for the most part. The trading environments thought of as markets today are too heavily managed to resemble free price discovery mechanisms.
Today’s trade was a perfect example. How did the status quo resolve the collapse in the gold / silver ratio all the way to the 50 day moving average? Answer: By smashing gold while a small bid was allowed to enter silver. Silver tends to out-perform at the end of cyclical runs no matter the degree, setting the stage for more sector wide weakness as the gold / silver ratio corrects back up into options expiry, and likely beyond if the entire move from June needs to be retraced now.
The good news is a bullish five-wave sequence has now traced out in silver (and its derivatives too) — signaling further upside once consolidations (a – b – c affairs) are traced out. This was a missing component to the larger sector sequencing up until just a few days ago.
So it appears the manipulation might be able to delay more impulsive moves in the sector — but not forever.
Like I said earlier today…the (huge) money from bonds needs to go somewhere…and some of that money will find its way into PM’s.
And it won’t take much to move the entire tiny PM sector a great deal.
Cheers