Silver Correction - Still on the Way

This recent move up should not be considered the ride to the top everyone is waiting for. This movement over the days of May 23 - May 25th is just a buying spree for those that are tired of waiting and are taking advantage of Silver's cheap price.

Silver has yet to correct and that move down from 49 to 33 was and should not be considered a correction. It was simply manipulation by the biggest players to get out of their shorts position. Be wary of this up move, as they love to use moves like this to take profits at the benefit of the man on the street. The big 10 love to make it move up 5 or ten dollars then take their profits, whereby the average person unaware of the antics of these 10 big houses panic and sell. I've seen it over and over again.

Most of my colleagues and I agree that there is resistance at the 4o dollar level and we'll see Silver correct some time in June or July and it may test a new bottom in the mid 20's. Larry Edelson over at Uncommon Wisdom is a very smart player in the investing and metals field with over 30 years on the job and here is what Larry has to say about Silver.

Keep your eyes on the $1,477 level in gold as important support. If it gives way, expect to see a pullback to $1,425. On the resistance side, gold will find some selling between $1,525 and $1,545.

In silver, major support lies at $32. I expect that to soon give way, leading to a decline to $30, then $28 and quite possibly $23. Resistance lies at the $39 to $40 level.

On May 24th Dan over at Trader Dan's Market Views had this to say.

Silver pushed past resistance at the top of its narrow range which came in near $36. It ran higher in very early Asian trade but has not been able to extend its gains and push beyond $37. It has a band of overhead resistance near $37.50 that will be formidable and will need to give way if it is going to make a push towards $40.

At the end of the day of the 25th it had pushed just over $38 and seems to be heading up, but I warn you to beware of the traps set by the big boys. They just want you to jump in and make their paper worth more, before they pull out and take the money.

The recent drop in early May was caused by a 1,000 tonne sale that came out of the blue and yes, it was paper, not physical. There are some traders now worried about the vast amount of paper Silver, billions of dollars a week, being traded with nothing to back it up, save more paper.

In some cases, as much as $70 Billion a day is traded by China alone, and there isn't a pennies worth of physical to back the trade, it's simply manipulation to make their huge investment in physical worth more.

Keep your eye on the ball and watch for that correction in June or July. The market is way over bought, meaning there are tonnes and tonnes of Silver on paper and soon it'll be sold to take the profit. When it happens, back up your truck and load up, because Silver will be on the launching pad, fueled up and ready to go to the moon.