Ebb and Flow of Greed and Fear Within A Well Defined Trend

As Jim has suggested numerous times, margins will be raised until it’s a cash only trade. The headline below describes the classic ebb and flow between greed and fear within well-defined trend. Just last week silver was the hottest, most important market in the eyes of many traders/investors. A coordinated paper attack (operation) quickly transforms the resolve of greed into doubt of fear.

What has changed? Discipline suggests nothing. In fact, Friday’s money flows will most likely reveal even more aggressive accumulation and distribution by ‘smart’ and ‘not-so smart’ players, respectively. In other words, it will likely show, either this week or next, statistical concentrations of money flows or bullish setups in either gold, silver, maybe both. Until then, the computers sell, fear takes over the market, and retail money, following the lead of emotions rather than discipline, exit the market in disgust.

Headline: Silver Slumps on Higher Margins; Gold Drops on Report of Soros Fund Sales

Silver futures dropped, heading for the biggest three-day fall since March 2008, as an increase in margin requirements on the Comex in New York drove investors away. Gold also fell after a report that Soros Fund Management LLC may have cut holdings.

Silver for July delivery slumped as much as 5 percent to $40.465 per ounce, after losing 7.6 percent yesterday and 5.2 percent on May 2. The metal was at $41.175 at 2:01 p.m. in Singapore, taking losses over the three days to 16 percent. Immediate-delivery gold fell 0.2 percent to $1,533.28 an ounce, also lower for a third session.

Source: finance.yahoo.com