Note the following chart comparing the price action in Silver against the price action of the broad commodity complex as a whole as illustrated by the Continuous Commodity Index.
The parallel is remarkable. What appears to be happening is that silver is becoming a type of proxy for the complex as a whole and in particular, for risk trades.
When risk trades are in vogue, silver is rocketing higher alongside of the rest of the commodity complex. When traders are avoiding risk and jettisoning the risk trades in favor of bonds or cash, the entire commodity complex seems to be following the exact same path as silver, namely down.
As mentioned in my earlier post, until the risk trades come back on, the silver market is going to languish. I am not sure what pill the hedge funds will have to swallow to bring them back to another frame of mind but the fact is we need the money flows that only the hedge funds can provide to take it back up again.
"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat
Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput
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