Wednesday, March 05, 2008

Short Squeeze, Is the Silver story going to pass you by??

After yesterdays blood letting I was not sure what to expect today. It was quite possible that a major correction was in play and the bottom would continue to fall out but overnight things firmed up with Gold steady and Silver slipping just a few more cents. So today it was quite an eye opener when Silver made up yesterday’s loss to add .99 cents by noon and Gold was up a whopping $27 dollars. Yesterday’s profit taking, manipulation, correction or what ever else you want to call it was stalled in its tracks, and responded with new highs, now that is strength!

Two days ago there was an article calling a Short Squeeze in silver, now I was not convinced and by morning the prices had turned south so I discounted it and did not post or comment on the piece. While I’m still not sold that now is the big break, today’s numbers justify sharing this article with you by Jason Hommel

Now Jason Hommel has quite a following but I generally discount him due to his predilection to intermix faith, biblical history and silver investing. As I’ve stated before there are enough good reasons to own silver without relying on the “A burning bush told me” investment rational. That said, Jason believes strongly in his commodity of choice and does some good detailed research and writing which makes him worth a look now and again.

The clincher in my books was today’s post by Ted Butler, who explains the pressure the silver shorts and other commodity shorts are finding themselves in and the revelation that at today’s prices the 4 biggest silver shorts have lost $1 billion in the last 2 weeks and $2 billion in the last two months.

This kind of loss can put some powerful hurting on whoever holds these shorts, and if these shorts were held buy financial institutions already facing loses from other aspects of their business this could be the final nails in their coffins.

So is there a squeeze on? it’s possible. Is there a squeeze due? it’s probable

Is now the time to take profits and run? No bloody way!!

Be strong, be brave, so what if you lose a potential high for this quarter or half, it's certainly better than being empty handed when you realize it's going parabolic and you missed out on buying back in.

1 comment:

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