Some explanations

09/05/2011 by Philinje.

Last week was brutal on silver and no doubt the decline was made steeper by the margin hikes. It’s easy to feel angry, and mostly that should be at oneself. It’s amazing that so few people caught the top, but it’s always like that. Trailing stops are the answer.

A more detailed response comes from Ted Butler, the most knowledgeable and reasonable voice of silver for the average investor.  Here is a truly balanced critique of what happened:

http://news.silverseek.com/SilverSeek/1304873055.php

It behooves us normal people to remember that there are much more powerful forces out there who want to line their pockets with our cash. That is the reality of this dog-eat-dog world. So let’s not get complacent and think that massive uptrends are going to go on forever, due to whatever brilliance on our part. That’s just a sucker job so they can rob you blind on the way down.

Now here is a thought-provoking piece about gold foretelling the commodities complex by 75 or 80 days:

http://pragcap.com/gold-foretold-the-commodities-dip

This is brilliant and probably pretty accurate. If we use 75 days the bottom is due on May 19 for commodities.

One scenario that could play out is a rebound this week, maybe hitting a high on Wed, then a decline for a week to the true bottom, then another run up to new highs. The dollar is not really rolling over right away, so we may have a higher high coming.

If the new bottom scenario plays out, the levels to watch are $30 in silver and $1445 in gold. But another possibility is a consolidation that drags on for a couple months, before the launch to new highs occurs.

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