Saturday, February 25, 2012

Cartel Dumps 102.5 Million Ounces of Paper Silver in 7 Minutes, Yet RAID FAILS!

photoIf you happen to need to take a trip to an NYC ER room tonight and experience an extraordinarily long wait, The Doc's about to explain why.
Silver has put in a monster rally this week, and much to the cartel's dismay, was preparing to close the week above $35.50 today, preparing a break-out next week that could potentially fill the gap from the September smash to $40, and see silver off to the races back to challenge the all-time nominal highs near $50.  Obviously, the cartel stepped in with a massive paper raid to prevent such a bullish weekly close.
That's where things got interesting and likely induced more than a few Myocardial Infarctions today among JPMorgan execs.

Check out the following price and volume chart screen shot on this 1-minute silver chart courtesy NetDania.
Notice the massive volume that began at approximately 14:47, with 4,000 paper contracts dumped on the market in a single minute, followed by 2,500, 1,800, 3,200, 3,000, 2,900, and 3,100 over the next 6 minutes.

Have a look for yourself:


That's 20,500 paper silver contracts or 102,500,000 ounces of paper silver suddenly dumped on the market in a span of 7 minutes!

Now here's where the collective Myocardial Infarction comes in among JPM execs:

After dumping 102.5 million ounces of paper shorts on silver in 7 minutes, silver fails to collapse into a waterfall decline, and STAGES AN OUTSIDE REVERSAL TO CLOSE THE GLOBEX SESSION BACK ABOVE $35.50!!!

Blythe's View Friday Night

*Update: Please understand that in order to observe this blatant manipulation attempt on your own trading platform, you need to be using a 1 minute chart, showing volume as well as price candlesticks, not just a simple price chart like kitco. (For those wishing for an explanation of candlestick charts, BrotherJohn did an excellent job last night here discussing the cartel epic fail)
The reason this 102.5 million ounce paper raid will not appear on a simple price chart is the fact that the raid failed!  Someone (likely Asians) had a paper buy algo IN POSITION FOR THIS RAID, and instantly took the other side of the cartel's massive paper dump, preventing a waterfall sell-off and causing violent and unprecedented inter-minute price swings as the battle took place.  After the cartel had expended 102.5 million paper ounces of silver unsuccessfully, the large buyer then bid silver back up to near the day's highs as the paper selling onslaught subsided.
Rather than debating whether or not this event actually occurred (it did), you should be focusing on WHO was the other party that prevented this raid from collapsing the price of silver, and WHY they were ready and willing to take the other side of a cartel dump of paper silver equal to the volume of 15% of annual world supply, or 3 years of US annual supply over the span of 7 minutes!

With reports swirling around the web early in the week that the CFTC had contacted NetDania regarding this matter, 4 days after our inquiry, we have finally received a response from NetDania regarding the apparent failed cartel raid.
Click here for Net Dania's response to our inquiry