1XbCmhL8Lj40WthVv5rbCDEgKtwPu: 2012

Saturday, December 1, 2012

How To Determine The Current ES Emini Contract Expiration Month

In this article we are going to learn how to determine which ES emini contract is currently active and live on the Globex electronic trading system and WHY it is important. Since index futures symbols change every three months at expiration, new traders can easily become confused and if not careful, find themselves holding a contract through expiration unintentionally. For those individuals using the ES futures as a vehicle for gaining short term profits, holding a position through expiration and settlement is not the desired outcome. So how do we know which contract is current?

S&P 500 ES emini futures contracts expire four times each calendar year or every three months. The months in which they expire never changes and are as follows: March, June, September and December. Initially, this can be very confusing for new individuals entering the futures markets but once the months are committed to memory, it becomes second nature and no longer a going concern. Each month has its own alpha or letter identifier. March is (H), June (M), September (U) and December is (Z).

These letters alone however do not really tell us the whole story since they are only used to identify the expiration month. We need to combine these letters with the current year in which the ES is being traded. For example, if the current trading month is July, 2012 we know the contract now on the Globex electronic system is set to expire in September since it rolled over the previous month of June. The year is added to the symbol and follows the month identifier, in this case the letter would be U followed by the number 12 since it is July, 2012 and we are trading the September 2012 ES contract.

There are several emini futures contracts which represent other index cash markets including the NASDAQ, Dow and Russell exchanges along with the S&P which we are outlining in this article. There must be a symbol which identifies the specific index that is represented by the futures contract, in the case the S&P 500. This index is identified on the Globex system by the letters ES followed by the current contract expiration month and year. So the current contract would be identified by the symbol ESU12.

ES - S&P 500 Emini Futures Contract U - September Expiration 12 - Year of Expiration

The contract letter identifier never changes, only the month and year. Once we clearly understand and have committed to memory the expiration months, knowing which contract is currently trading is easily determined by the using the current month and year.

Pent Up Silver Demand and The CFTC Linchpin Pointers for Commodity Traders The Gann Technical Analysis of Price Movements Reasons Why China Wants Its Citizens to Own Precious Metal Various Orders in Futures Trading

Trading Forex With Fibonacci Ratios

Those who are into Forex trading can also make use of the Fibonacci Ratios. The ratios come from dividing any two consecutive numbers in the Fibonacci number sequence to get a mean that is 1.618. This is also referred to as the golden ratio which can be observed in the natural world as much as it is in the trading world. Forex traders have to be aware of the two most important points when they are making trading decisions. These are points 38.2% and 62.8%. However there are also other important points to watch like 75%, 50% and at 33%.

Traders can make use of the Fibonacci ratios to place their stop loss orders. This will prevent them from incurring too much loss in their trading activities especially when they are already trading against a support line. Aside from this, traders are also able to determine the risk that they are taking based on their position size. They are also able to lock in their profits based on the Fibonacci ratios.

In order to benefit from the use of the Fibonacci system in Forex trading, people have to learn how to determine the market trends accurately. They also have to know when the retracements may be expected so that they may know the right trading moves to employ. They can for example buy when they see that the price of the asset is on the support level or they may opt to sell instead if the price in the market in going down.

Forex traders may be able to make use of the Fibonacci ratios through charts where they can plot the support or resistance zones. They have to draw the trend once it has completed a cycle. Traders have to find a completed trend within a given time frame. They need to be able to identify the same trends on the pair of currencies that they are dealing with. Traders have to make use of the charts that they have drawn as guides in making decisions.

When Forex traders see that the price is steadily going up, they may take a long position meaning they can buy the currencies but they have to check diligently as the price approaches one of the Fibonacci Ratios. It is possible for the price to go down and they may lose in their trading transaction if they are not able to sell before this happens. In order to prevent this loss, they need to place an order for a stop loss so that they may be able to save the profit that they have already made instead of losing it. It is also possible that the trends will move the other way and prices move down. In such situations, the Fibonacci Ratios are considered as resistance and traders may exit their positions.

Pent Up Silver Demand and The CFTC Linchpin Pointers for Commodity Traders The Gann Technical Analysis of Price Movements Various Orders in Futures Trading Reasons Why China Wants Its Citizens to Own Precious Metal

Choosing the Right CFD Brokers

Unless a person has the time and skills to deal in contracts for difference trading, then direct interactions could be possible. However, most of the investors do not have the luxury to have a closer look to the market and execute whatever things should be done. This is because CFD trading will require a trader to monitor the market closely. It has to be a hands-on method activity. Nevertheless, it is a praiseworthy thing that CFD brokers are here in order to make this transaction possible for busy people.

With the foregoing, a trader cannot just pick anyone to be a broker in their behalf. A reputable and reliable one is a requirement, In this regard, how do you think could a trader assess if CFD brokers are trustworthy, reliable and competent to do the job? There are, in fact, at least three (3) things that any trader should be looking into when it comes to this. These are about the range of asset, experience as well as other terms and conditions.

Asset Range

This is about the range of the assets that CFD brokers can handle. This is extremely significant because not all brokers can handle all assets. There are some brokers that can only handle shares, stocks or indices, which means that they may not be able to handle CFDs on commodities properly. On the other hand, there are also some agents who can specialize more on commodities like gold, crops and many more.

Why Experience Matters?

On the other hand, another crucial aspect that traders need to consider in looking for CFD brokers is their experience. This is because this aspect also tells traders about the expertise of any broker. If they have been in the business for a long time, then this may surpass the technical background of any agent. This is because there are some investors who prefer agents who have a formal education background on finances, specifically contracts for difference.

However, in times when a person does not have any technical education on the subject matter, then this can be substituted by their years of experience. If CFD brokers have been in this business for more than a decade already, then traders can make sure that they already know the nitty-gritty, mechanics as well as rules and regulation surrounding this transaction.

Terms and Conditions

Thirdly, but not the least, the terms and conditions of all CFD brokers should be among the top considerations. This is because it is about how much they will charge on their commission as well as other agreements between the brokers and the primary trader. It is in this light that reading the contract carefully is significant to make sure of this.

What Is Index-Based CFD Trading?

As its name is suggesting, index-based trading of contracts for difference or CFD is about speculating on the overall performance of the stock market or its sector. This is not the same as trading on shares. This is because the latter has more focus on the stocks of certain and single company rather than the market as a whole. Index, in contrary, refers to the market or sector that comprises of different companies. Hence, what this means is that it will be looking in to the performance of the sector rather than the performance of just a single company.

Among the most common indices where traders can make CFD positions include the FTSE 100, S&P 500 as well as Dow Jones and many more.

In making a position in this form of CFD trading, the trader agrees in exchanging the difference of the price of a certain index from one point or time to another period. In order to understand this, a person needs the basic knowledge on how contract for difference trading works.

With the foregoing, this form of trading means that there are buyers and sellers. The contract or agreement states that the seller will be paying the buyer for the difference. This difference is the disparity between the value of a certain asset at current prices and the contract price. If the said difference is, in contrary, negative; then it means that it would be the buyer needs to pay the seller instead.

Now, applying this to indices, a seller and buyer will have a contract or agreement. If a trader expects the S&P500 index to go down in the coming days, then the right position to take is a "short" position, which means to sell the position. This is because if traders expect it to de-valuate in the coming trading, then the wise investor would dispose it by selling it. However, on the other hand, there would also be some speculations that are in contrary to the former. Some would expect the index to appreciate in the coming days. In this instance, the best thing to do is to take a long position, which is to buy.

In this regard, why would a trader choose this instrument over the others when it comes to CFD trading? The answer to this is quite easy. This is because this instrument allows a trader to have an easy access to unfamiliar market. The best thing about this is that traders can do this without worrying too much on paying clearing fees. Aside from that, most of the main indices are basing on the blue chips, which is an appropriate measure of whatever the sentiments are in the current market. In other words, this means that a trader is primarily investing or positioning on the blue chips rather than a single share.

Pent Up Silver Demand and The CFTC Linchpin Pointers for Commodity Traders The Gann Technical Analysis of Price Movements Various Orders in Futures Trading

"R-C-M-L" in CFD Trading

RCML refers to the four (4) extremely significant things that investors should understand when it comes to trading contract for difference or CFD. These are about its risks, costs, as well as the aspects of margin and leverage. It is in this regard that this article will try to explain these aspects in as layman as possible so that people can comprehend these concepts better.

What are the risks of trading CFDs?

First and foremost, more than the profits and earnings that an investor can benefit from trading in this platform, it is always vital to know the risks of trading these instruments. This is because these are also the factors that will determine whether a trader will earn something or not in the end. For example, even if a trader has the best plan or strategies, it will be futile if they will not take into consideration the risks at all. In other words, they might even fail too if they are not going to account these.

What is the cost of CFD trading?

Secondly, on the other hand, the cost of trading these instruments should also be among the first things that traders must ponder on. The general rule of thumbs suggests that when the costs are too high and beyond the rewards that the traders are expecting, then there is no point in engaging into this in the first place. These costs include the money traders need to spend for opening an account, hiring a broker as well as the capital requirement. Of course, traders must balance the cost with the rewards. There should be more rewards than the cash outflow.

What is margin and how it works?

Thirdly, margin is one of the most basic concepts that investors should understand in this platform. This margin refers to the deposit requirement in order to secure the transaction against those with leverage. This is extremely valuable in order to make the leverage work smoothly. In most trading platforms, the margin requirement is at 5% mark. Hence, this affords the leverage up to a factor of 20. Nevertheless, this rate may still vary, depending on the market condition as well as overall trading climate.

What is leveraging in CFD trading?

Fourthly and lastly, trading in this platform is all about leveraging. This is, in fact, the key element of trading this instrument. Aside from that, this also sets apart this from the other financial instruments out there. This is because it is a fund or capital that traders can use in order to access large transactions in the short-run. Hence, this may have an effect to provide greater capital returns than just trading in ordinary manner. However, traders should not abuse this because this also amplifies the possible losses.

It Takes High Prices to Fix High Prices and It Takes Volatility to Reach Stability - Philosophy

When you study complexity and chaos you begin to realize that many systems are self-sustaining, close looped, and end up solving their own problems. Any large complex system which is ongoing generally has these characteristics. In fact, we see them all the time in nature. In fact, I've often considered this whole issue of global warming, climate change, ice ages, and warming periods as part of the Earth's cycles. If things move too far in one direction, the pendulum shifts, and things go back the other way. In other words there's nothing to be alarmed about, it is the nature of things.

What type of things you ask? Well, perhaps many more things than you've ever considered. For instance our economy, the jobs market, the stock market, and all sorts of other things as well. How about commodity markets? Okay so, let's talk about that for a moment shall we?

There was an interesting article in the Wall Street Journal on October 4, 2012 titled; "Recent Rise in Natural Gas May Be Smoke," by Spencer Jakab which had an interesting bit of insight;

"Whenever consumers complain about the cost of heating their homes, feeding their families, or driving their cars, commodity traders love to remark that 'it takes high prices to cure high prices'. The same thing works in reverse."

Of course in reverse he was speaking to the glut of natural gas on the market causing low prices due to the new fracking technologies creating abundance, and Matt Damon's new movie aside, these new fracking techniques are astounding at freeing up this energy. Now then, when the prices are too low, producers see no profits, thus, some stop producing and through supply and demand things equal out, and the price comes back to meet the demand curve. So, it seems that the Ying-Yang of commodities and free-markets need little intervention to work their magic.

Since free-markets solve their own problems based on willing buyers and sellers, it seems rather ridiculous for lawmakers, regulators, or consumer groups to demand more price scrutiny. After all, these problems will be solved without intervention, and perhaps much faster as well. Further, price intervention for whatever reason or by whatever scheme only seems to exacerbate the volatility causing even more unintended consequences.

For instance, propping up prices in any way creates a bubble, while scarcity creates a run on that product or service, creating artificial scarcity isn't wise either, nor does it prop up prices long if the market allows new entrants. Price limits or price controls also cause shortages as fewer producers find it worth their while to enter the market to provide those goods and services.

Perhaps, we ought to think twice about voting for any politician who suggests big time intervention in commodity, stock, or free markets. Please consider all this and think on it.

Tips for Options Traders

People who are into the trading business can also consider options trading. However, this may not be the usual type of market where they get hold of the physical commodities or the stocks that are being traded. There are some important things that people should know and understand before they actually invest their money in order to diversify their trading portfolios. Although most traders would agree that options may be a risky business, they can still gain from it if they understand how this market operates and if they know how to apply various strategies.

When traders buy options, they are lessening the degree of risks involved in their investment. This is possible because they are not actually paying for the entire amount for a particular volume of assets. They only transact on specified portions that requires them to pay for a fraction of the total price involved. Those who are dealing with the actual commodities or assets have to be ready with their big capital in order for them to participate unlike traders in options who do not need to have lots of money in order to start with options trading. Options traders also limit their losses to the amount that they have invested as they do not have to pay for the entire value of the underlying assets in the contracts.

Beginner traders have to understand how they can make use of leveraging when it comes to options trading. They can buy calls even without having the entire capital for the commodities. Traders need to pick or buy the right call so that they may be able to mimic stock market positions as much as possible. Leveraging provides them with the chance of gaining more profit even without having a large amount as capital to start with. However, new traders also have to know when they can use this strategy as there are some market situations when they may lose their investment instead of gaining from it.

Traders who are into options can get into other forms of investments. They may try working with stock movements especially those that are considered as volatile movements because of the time element involved. Unlike the traditional trading platforms, options traders can work online and they can start with very low capital. They may also be able to find online brokers that would allow them to open practice accounts first in order to familiarize them with the procedures that are involved in making online options trading transactions. People may also consult with options trading professionals if they would like to be guided when they make investments in this type of market.

Helpful Tips for Commodity Traders

Individuals who are planning to participate in commodity trading have to learn a lot of things before they put in their investment in any of the assets or commodities that are traded in the market. They may have the opportunity to really earn a considerable profit if they know what they are doing and if they are making the right trading moves given the prevailing market trends and conditions. In order for commodity traders to achieve this, they need more than enough knowledge and adequate trading skills to start their trading business.

Individuals also need to study more about the psychology of traders and to understand it accordingly. Commodity traders are at times driven by their emotions and this may not benefit them in terms of making errors as they are carried away by it. They have to think clearly and objectively based on their market analysis. However, there are situations when they go along with the decision of the majority of traders which could mean more loses instead of winning in the transactions. They need to make their decisions based on sound market analysis and not on the general consensus of the traders only especially when their decisions are hastily executed without careful thought and study of the real market trend.

Aside from the opinions of other traders, there are still other sources of information. Commodity traders have to filter whatever information they get hold of. They have to select those that will be helpful to them as they decide on which market moves to take. People who would like to enter the market will have to prepare themselves first aside from the capital that they have to put up. They will have to know their commodities well so that they may understand how market factors may influence its price movement in the market. They will likely win in their trading activities if they have sufficient background on the item that they are dealing with.

Those who are new in commodity trading may need the help of expert commodity traders. They may be able to seek out their wise pieces of advice when it comes to buying or selling the assets. People may choose some other types of investments too or they may opt for a wealth management company to help them select where they could invest their money. Commodity traders need to understand that they have various options when it comes to selecting the assets that they will trade. They do not need to put everything in one type of commodity only because when they do, they stand the risk of losing all in the end.

CFD Trading and Surrounding Regulations

In United Kingdom, the Financial Services Authority is the one regulating and monitoring the world of contracts for difference (CFDs). Aside from that, there are various European Union directives pertaining to this transaction. Most of those directives seek to make the trading field smooth all throughout the entire region. It is in this light that traders and investors need to comply with the policies of the FSA so that they can continue to trade without hindrance or discontinuance. The FSA is also the one that is regulating the brokers working on this field. Hence, investors who are hiring brokers need to make sure that the one they got is an authorized or regulated one.

With the foregoing, the other regulations surrounding the CFD trading touch other aspects too. Some of these include the taxation, pricing or costs and even assets that investors can trade.

Taxation: Gambling versus Investment

On the one hand, the taxation treatment for this is primarily dependent whether the law considered it as a gambling or a form of investment. In UK, it is not equivocally a form of gambling. Well, this is because gambling is about fortune and chance. However, CFD trading does not solely rely on pure chances and luck. This is also because there are measurable factors that traders can research and interpret in order to get over the risk and earn profits.

In this regard, the government of UK taxes the income of a trader from this transaction. In some countries, this is not taxable at all since some governments treat this as a form of gambling rather than an investment. In terms of the taxation, it is, in fact, liable to capital gains when the trader gains more than the annual exemption level of Â£10,000. However, this is not liable for a stamp duty unlike in share transactions.

Pricing and Costs of CFDs

Like most of the financial instruments, the pricing of CFDs is primarily dependent on the market rate, in addition to the weighted factor. The broker includes the said factor in order to have a more accurate impression of where the market is most likely headed. In terms of the costs, CFD trading is more cost efficient. This is because it consists of only the commission of the broker and the financing cost.

Assets for Trading

Investments can engage into CFD trading with a wide range of assets, markets as well as instruments. For instance, traders can participate in a transaction in FTSE 1000 shares or even on index. Aside from that, other popular fields where investors can trade on CFDs include different commodities like rice, pork, livestock as well as precious metals. Further, this can also be traded on currents, bonds and interest rates.

How to Trade Commodities

Individuals who are planning to enter the trading world need to understand more about it before they invest in order for them to gain and not to lose their money in the process. A clear understanding of what is being traded and the processes that are involved will greatly help people especially those who are still new in this business. First of all, commodities refer to the raw materials that most people need in order to live. There are three kinds of commodities namely agricultural products, energy and metals. These commodities are being traded the world over.

People also have to understand the basics of commodities such as tradability, deliverability and liquidity. They also need to know degree of risks that they are taking if they invest in specific types of commodities. However, people who would like to trade can also reduce these risks especially if they learn more about it. There are certain commodities that pose geopolitical risks such oil deposits in the Middle East. People can trade only with international oil companies that have established themselves in international markets over a period of time and companies that deal with economies of scale.

People have to be aware of traders who speculate on the price changes in the market. They have to learn how to discern real market trends and not to go with the speculators who only want to gain profit in a very short time. People also have to be careful when making trade transactions as they may also run the risk of fraud. Though commodities trading in exchanges are being regulated, there is still the risk of becoming a victim of fraudulent trading. People then have to study their options carefully including the firms that handle the commodities that they would like to trade.

People may have the option of getting a commodity trading advisor. However, they have to check the credentials of the securities professional that they would like to hire aside from him or her having the required license in this particular field. They may also dig into the trading background and the year of experience of the advisor in order for them to gauge his or her skills in providing sound financial advises as trading commodities may require people to put in their investments. People may gain a lot in terms of profits if they know how to trade commodities that they have chosen.

Gas Prices Jump More Than Expected

The recent jump in gas prices were expected to be much more gradual. We saw commercial traders as strong buyers of crude oil below $80 as June came to a close. We firmly believed that this would be the bottom of the cycle as the national average fell to $3.30 per gallon. What no one expected were the simultaneous mechanical failures of some of the main pipelines and refineries. This has caused the price of petroleum products like heating oil, gasoline and diesel fuel to skyrocket by 25% in little more than one month.

The refineries here in the U.S. use about 9 million barrels of crude oil per day. The last two weeks has seen nearly 2 million barrels per day taken off supply as unplanned shutdowns due to various mechanical issues and fires have popped up across the country. Further adding to the refinery issues is a cutback in supply that will be coming from Canada due to a leak sprung in the Enbridge pipeline, which has spilled more than a thousand barrels of unrefined crude oil in central Wisconsin. Enbridge has fallen under increasing regulatory scrutiny, as this is just the latest of a trail of pipeline failures. The most notable was a 2010 incident, which dumped 20,000 barrels of oil into the Kalamazoo River.

Mechanically, major refiners near Chicago and San Francisco have both been shutdown. There are two refineries that have been shutdown simultaneously in the Chicago area and both of them are among the 10 largest refiners in the country with the Whiting, Indiana facility ranking 7th and the Wood River, Illinois facility ranking 10th. These outages combined to raise the price of gasoline in the Chicago area by more than $.44 in less than a week. The Chevron facility in Richmond, California is responsible for 10% of the gasoline production on the west coast. Reports are conflicted on the how long these refineries will be out of operation. Estimates range from weeks to months on each individual facility with consensus that the Chevron facility in Richmond will probably be out of service the longest.

Political and fundamental factions had already begun battling over the true value of crude oil from March through July. This is seen as the battle between speculators and commercial traders. Commercial traders had been heavy sellers of crude oil futures from March through May when the market was trading above $103 per barrel based on Iranian threats and general unrest in the Middle East, which led to speculative buying. These threats were competing with a market that was massively over supplied. Eventually, over supply won and the Commitment of Traders analysis generated sell signals at both $109 and $106 per barrel. June's precipitous declines moved commercial traders to the buy side as they covered short positions and increased their positions by more than 30% during the month of June.

The final fuel to this petroleum rally is the expectation of further government stimulus to the economy. We've suggested over and over that the key to the upcoming election is the domestic economy and recent polls concur. The biggest thing President Obama could do to help himself would be to force a resolution in the Eurozone. The markets hate uncertainty and any conclusion to the drawn out death spiral of Ireland, Portugal, Spain and Italy would create a huge relief rally in the stock market. However, since his sphere of influence doesn't extend far past our shores, he'll do the next best thing by flooding the market with Dollars, which will lead to nominally lower interest rates and show that he is taking action.

Regrettably we will bear the unintended consequence of higher gas prices as our Dollar is devalued on the global market and our refineries find it more profitable to ship finished petroleum products overseas, rather than sell them on the domestic market.

Silver Prices: When Schrodinger's Cat Jumps Out of Pandora's Box

Although silver is traded as a commodity, it is also a form of money. You only have to go back less than a hundred years in the long span of human history to discover that silver once circulated widely as currency, typically in the form of silver coins.

In fact, the UK's paper currency the Pound Sterling originally obtained its name from the British currency that once represented the value of one pound of sterling silver, which is a mixed metal that consists of more than 92.5 percent pure silver.

Furthermore, as you look closely at the supply and demand profile for silver, the issue of its monetary status seems increasingly important.

Silver's Supply and Demand Profile Make it an Attractive Store of Wealth

All the silver ever mined that is currently available for use is known as the stock of silver, while the yearly amount of silver mined is known as its flow. Silver has a relatively high stock to flow ratio compared to other commodities, as does gold.

This means that silver's intrinsic value should remain fairly stable over time because the annual increase of the available amount of the metal is relatively low compared to the amount already in circulation.

This gradually increasingly supply of silver has supported its use by investors as a store of wealth over many centuries, and it makes silver far superior in this regard to easily printed paper currencies that facilitate an ever expanding money supply and which consistently lose value.

Despite Silver's Price Discovery Issues, it's No Schrödinger's Cat

Furthermore, a closer examination of silver's supply/demand situation and the nature of price discovery leads to a puzzling question: Why has silver's price remained muted for so many years?

Beyond any benefit that the few consistent shorts that make money covering when the price drops might reap, the current price of silver seems just too cheap on a historical basis. It typically falls far below conservative inflation-adjusted price estimates.

When this apparent undervaluation of silver is investigated further, one might just find a faulty price discovery mechanism. When seeking a motive for this apparent market inefficiency, the conversation typically morphs into a demand issue.

Nevertheless, a commodity that trades largely via synthetic derivatives, such as futures and options,means that its price is determined by those derivatives markets, rather than by actual physical demand. This situation reveals the paper market for the sham that it is.

Looking closely at price discovery reveals that silver trades like a commodity, but its price is dominated and even manipulated by the very entities that benefit the most from keeping the over-inflated financial system from naturally imploding.

Despite these ongoing price discovery issues, silver seems far from being a bouncing dead cat and seems more akin to Schrödinger's paradoxical 'half dead' cat that could well surprise the market by making a dramatic price recovery. The fact remains that silver is a valid form of currency, especially in a crisis situation, as well as a valuable commodity with strong underlying industrial demand.

Silver's Price Locked in Pandora's Box?

Muted silver prices in the context of higher production costs have relegated most silver mining activities to the 'by-product' variety. This situation makes it more difficult to make reliable predictions about the future supply of silver since it typically depends on the production of other mined commodities.

Furthermore, the 'Pandora's Box' of silver's price has been kept closed for years due to the official dishoarding of the precious metal by central banks that has resulted in price suppression or even manipulation, as some observers have claimed. When this box finally opens, the price of silver will be set loose to find its true level.

Taking a close look at industrial demand also involves peering into the depths of an economic crisis as a thirty or forty year credit expansion cycle unravels, often with disastrous consequences. When the solutions are examined, suddenly all of the commodities become attractive investment alternatives, and silver and gold simply rise to the top.

Basically, when you examine the roots of the current financial crisis, sooner or later one discovers that the use of an ever-devaluing and intrinsically worthless paper currency is the true weakness of the financial system, not a faltering economy. Silver will continue to offer investors a safer haven against both gradual and catastrophic forms of wealth erosion spurred on by ever-increasing national debts and quantitative easing programs.

The Silver Market Basket Case

Silver bullion investors often feel as if they have become a basket case. As an investment class, they are increasingly growing weary of the suppressive manipulation that characterizes today's silver market.To the outside observer, the situation in the silver market could seem even more confusing and grotesque.

What is a basket case, you might ask?The term "basket case" is typically applied to someone or something that is in a completely hopeless or useless condition. It apparently originated during the First World War to describe fighters whose arms and legs had been removed by explosions or surgical amputation. A basket could be used to carry the torso and severed limbs of such unfortunates.

The Silver Market's Severed Limbs

When you define the term "basket case"and apply it to the silver market, it actually does seem to fit the current situation. Each of the four characteristics below represent the severed limbs of the silver market:

1) Price Suppression: A multi-decade long mispricing due to blatant and now overt price management that reigns over short to medium term silver valuations. This policy causes counter-intuitive silver price moves and further baffles the innocent investors seeking safety from long term inflation due to loose monetary policy and an un-backed paper currency.

2) Supply and Demand Fundamentals:Given the long term effect and substantial degree of mispricing on the silver market, real supply and demand factors are almost impossible to digest and price into the market. Very few people, even those who specialize in the sector, can wrap their price analysis around the fact that there exists less above ground investment grade silver than gold available in bullion bar form.

3) Industrial Demand: Just in time delivery policies and a cheap price for silver has created a high-risk situation for the world's industrial users of silver. These concerns are ill-prepared to 'make the switch' to other metals in time to keep production lines going if silver's price were to move dramatically toward fair value. It is also worth noting that not all industrial silver is used for consumer electronics by a long shot, since a very significant amount of silver is used in the military industrial complex- which is alive and well today.

4) Regulator and Miner Capture: As past articles have noted, market regulators like the CFTC are now complicit in the manipulation as a result of their notable inaction. Silver has been "investigated" for market manipulation longer than any other commodity in history. Furthermore, silver miners are not only beholden to their shareholders- they also depend on financial support from the very same bullion banks that effectively control the price of silver.

The Beating Heart of Silver Demand

Still, you cannot take away the beating heart of ongoing demand for physical silver from the equation. Private investment and industrial demand for silver just will not go away no matter how long its price remains suppressed.

Using the basket case analogy when comparing silver with how distorted the pricing of equities,bonds and currencies have become, one can still find flesh at the center of the physical silver market and not simply a computer-generated virtual representation of a torso.

At least you can still use a basket to carry your silver away in. So the analogy fits.

For more articles like this, and to stay updated on the most important economic, financial, political and market events related to silver and precious metals, visit http://www.silver-coin-investor.com

Pent Up Silver Demand and The CFTC Linchpin Pointers for Commodity Traders The Gann Technical Analysis of Price Movements Various Orders in Futures Trading

Rare Earth Metals - Solid Investment in Stable Markets

Investing in rare earth metals is a means of protecting your currency during times of financial uncertainty. There will always be recession from time to time and growth but the last few years have seen an unprecedented failure of institutions considered infallible. REE are an investment that can be strategically traded too. Like gold and silver, rare metals are tangible assets owned with full legal title by the purchaser and held in storage facilities. Rare earth trading is not subject to the usual financial market trends meaning value is not dependent of market whims.

These metals are the hidden ingredient in almost every manufactured component part or finished product across a broad spectrum of industries High technology products are manufactured at a rapid pace with new technology developed almost before the previous version has hit the shops.

These days, smart phones, tablets and other personal devices account for a huge market that demands rare earth metals. Other items taken for granted such as your car, flat screen TV, clothing, opticals, and medicine all contain rare earth metals. Around 80% of all manufactured products contain rare earth metals and the rate of development of new technologies mean the demand for these metals from industry exceeds actual industry production. This factor gives the metals their intrinsic value and the reason why the price of these metals should increase in value year after year.

Some typical rare earth trading metals include Copper, Indium, Gallium, Deselenide, Tantalum, Molybdenum, Chromium, Cobalt, Zirconium, Tungsten, Zirconium, Bismuth, Tellurium, and Hafinium. It is possible to put together a package of metals that are relevant to certain industry sectors meaning you can take advantage of the demand and supply from those specific industries. For example investing strategically in Copper, Indium, Gallium, and Diselenide would mean your portfolio would be of significance for the manufacture of PV thin-film solar cells. Another package containing Indium, Gallium, Hafnium, Tellurium, Tantalum, and Bismuth would be a general purpose investment relevant to all key industrial areas.

These REE are increasing steadily in value because of the extreme supply and demand situation created by China's monopoly of rare earth metals. The rapid growth of developing nations where rare metals are in massive demand, benefit the investor and trader in this market.

Additionally the developed industrial nations of Japan, USA, Germany, and Korea are also in ever constant need of these necessary rare metals for manufacture of high technology goods. It will take time for new mining operations to start up and contribute to the world supply of rare metals and it is unlikely these new ventures will be able to meet exponentially increased demand. This means your metal assets will increase in value and remain buoyant.

Investment and storage of your metals is arranged through reputable rare earth investment brokers who will manage your investment and storage and your trading. The pricing of the rare metals is determined by the fundamentals free market supply and demand and not subject to speculative trading making rare earth metals a solid investment in a growth area unaffected by daily financial markets.

Silver Prices and the Risk of Speculator Double Jeopardy

When the price of silver eventually explodes to the upside, the silver market and those who are responsible for regulating it will probably blame the speculators.

Specs, or those who trade in a market without having an underlying commercial interest,have become the modern day scapegoats for extreme market movements, even if such movements seem entirely justified by the underlying fundamentals.

When a Simmering Silver Market Begins to Boil Over

The silver market has been so notably dislocated from its real fundamental based pricing for so long.Indeed, one can only speculate at what will happen when the silver market is eventually freed to move closer toward its considerably higher fair value.

In fact, one could reasonably argue that last time silver traded based on fundamentals was just before then-President L. B. Johnson removed it from circulation as currency in the early 1960's. At the time, he justified this drastic move by declaring silver to be in short supply.

Then consider how the price of silver ran up throughout the 1970's and into 1980. Factors commonly cited include the removal of the U.S. Dollar from the gold standard, and the Hunt Brother's alleged corner of the silver market.

Nevertheless, rumors swirled about why investment legend Warren Buffet was forced to sell his huge hoard of roughly 100 million ounces of silver in 2006, which he had very prudently accumulated throughout the low price environment of the late 1990's.

Furthermore, today's price discovery mechanism for silver allows the actual physical supply of 40 or 50 million ounces of silver metal to form the basis for daily trading in 100 times that amount. Silver is also perhaps the most volatile of all commodity markets and one that has the largest concentrated short positions in terms of days to deliver based on world production.

After 47 years of industrial, technological and medical innovation involving silver, the shortage of physical silver continues in spite of the widespread government dis-hoarding of precious metals seen over the same time frame.

The Eventual Silver Rally Will Probably be Blamed on Speculators

While speculators may ultimately be considered responsible for taking the silver market higher, the specs are not and will not be responsible for what ails the silver market.

Deep structural deficiencies were put in place long ago when bullion banks were allowed access to the commercial categories in the silver futures markets. These banks soon became the only big sellers, while the regulators watched but did nothing as these banks routinely fleeced speculative longs and the retail investor by proxy.

The resulting over-abundance of paper silver has resulted in a prolonged pricing disparity that has created the fuel for a future inferno in the silver market.

Regrettably, this manipulative process remains very much alive, and the real risk for the new money coming into silver via the derivatives markets will be that they either failed to take - or perhaps did not want to bother to take - actual physical possession of metallic silver.

In all likelihood, not only will the specs be blamed for the upcoming silver rally, but they will very probably be shut out from profiting from it in the process. The time to get well invested into the silver market is now, while prices remain relatively reasonable, not after the speculation in silver that will eventually take the market much higher starts in earnest.

Pent Up Silver Demand and The CFTC Linchpin Pointers for Commodity Traders The Gann Technical Analysis of Price Movements Various Orders in Futures Trading

Saturday, December 1, 2012

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