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Author Topic: RUMOR: Something Big is Happening in Silver on Monday  (Read 2119 times)
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tamo42
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« on: 2011 Mar 25, 12:18:10 pm »



I don't have a lot of time to get this out, so I'm just going to tell it like it is.

It is 2:13 Eastern (GMT - 5) right now, and there is a rumor circulating that the silver manipulators on the bull side are leaking information about Monday, Mar 28, 2011. The rumor isn't exactly clear whether there will be a strong move based on buying or if there will be a strong move based on a decision coming out of the CFTC.

A little bit of background: there is allegedly a formed JPM employee who has gone 'rogue' and is fighting back against his old bosses. Supposedly he is the one with the market clout that broke silver above 31. There seems to be some sort of personal feud going on. Frankly, I don't know whether Wynter (the former JPM guy) is actually upset about the downward manipulation or whether he just hates his old bosses. Regardless, I put on a small speculative position that will pay handsomely if something big happens on Monday.

If you are interested, you have less than 2 hours to put on a position in US markets.
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Neal McSpadden
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dobedo
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« Reply #1 on: 2011 Mar 25, 12:26:34 pm »

So, should we buy silver on this rumor, and then sell when the facts come out later?
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tamo42
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« Reply #2 on: 2011 Mar 25, 12:27:50 pm »

That's what I'm doing. Buy the rumor, sell the news. Keep in mind that this *is* a rumor, so don't go too nuts with it Smiley.
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Neal McSpadden
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« Reply #3 on: 2011 Mar 25, 12:38:54 pm »

Yeah, I just bought 30 shares of SLV, and its price went up by a nickel already! tamo42, you're a genius!! Thank you!
How about let's start a couple more rumors? I can really like this day trading thing after all.
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tamo42
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« Reply #4 on: 2011 Mar 25, 12:39:52 pm »

LOL, don't get too excited yet Smiley. We'll have to sit tight and see what happens Monday.
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Neal McSpadden
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tamo42
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« Reply #5 on: 2011 Mar 25, 12:46:38 pm »

Just did a little digging. It turns out Mar 28 is the deadline for the CFTC to declare position limits. I guess the rumor-monger (hey, I guess I'm one now) have some inside info on how that is going to turn out. If position limits are placed on naked shorting in the silver market, that would be HUGE news.
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Neal McSpadden
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« Reply #6 on: 2011 Mar 25, 12:52:02 pm »

Is that HUGE good or bad news for us rumor-mongers/long-silvers? I didn't know you are supposed to be naked when you short the silver. I prefer to wear my shirt long.
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tamo42
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« Reply #7 on: 2011 Mar 25, 01:03:29 pm »

LOL, well I have a bathrobe on, does that count?

The naked shorting thing is a big issue. Essentially, the large brokerage/bank/whatever you call them these days can go into the market and sell as much as they want even though they don't actually own the thing they are selling. This creates artificial supply, which depresses the price below what it would normally be. JPM is the most frequently accused firm for this in the silver market. Because silver is a small market, one firm selling non-existent silver in large quantities can take down the market quite a bit.

Over the past several months, people have been latching onto the idea of standing for delivery for their silver. When the buyer stands for delivery, it means he actually wants the 5,000 ounces of silver he has an order for. But because of the naked shorting, there isn't enough silver to delivery. What has happened since December is that the buyer is given a premium (aka bribe) to settle their contracts in cash.

So let's say you have an order for 5,000 ounces that you paid $30/oz for. That's $150,000 cost for you. On expiration day, the exchange calls you up and says that the silver can't be delivered, but the exchange will give you a 40% premium on whatever the settlement value is. So if silver is trading at $34/oz, you end up closing the trade at $47.60/oz, making $88,000 on the contract. A pretty sweet deal if you have the cash to play that game, and the balls to stick to it.

It is the selling of supply that doesn't exist that causes these dislocations in the market. If that is banned, or even limited to a great extent, the buying pressure will swamp the real supply and prices will shoot up.
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Neal McSpadden
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« Reply #8 on: 2011 Mar 25, 01:23:08 pm »

Wow, you really know your stuff! Thanks for sharing your expertise and rumors. This is more complicated than buying and selling badon's coins. If CFTC gets its way, does this affect all commodities equally or more so for metals vs. non-metals?  And, yes, my SLV just went up another penny. Man, a penny here and there, you are going to make me rich pretty soon.  How do I post this on that "LBC makes me rich" forum?
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tamo42
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« Reply #9 on: 2011 Mar 25, 01:26:25 pm »

The CFTC has jurisdiction over all commodities futures, but there has been a lot of focus on the metals lately. The could decide to make rules on all commodities, or just one. I don't know of any way to tell ahead of time.
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Neal McSpadden
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