The trade of silver vs paper fiat currency.
The whales accumulate silver during a down swing to ensure a lower cost average entry price.
Down swings in metals occur when fiat paper money strengthens.
Paper money strengthens when the interest rate is rising.
Up swings in metals occur when fiat paper money weakens.
Paper money weakens when the interest rate is falling.
Lets review an example of the above at work (ref Chart 1).
Black Numbers
During the (1) and (2) down swings there was high volume (accumulation) while short term interest rates move higher (green US 1 yr interest rate). These down swinging waves can be called accumulation because there was no break down in price. Therefore price was manipulated lower to achieve a cheaper cost average of price entry. The higher volumes during (1) and (2) has to be professional buying, as retail trade can not do this. Both (1) and (2) are tactical lower lows, and is not a price break down, yes you can call this a bear trap.
Now during (3) and (4) short term interest rates peak and begin to roll over. These swings are on good volume and are the last chance for the professionals to accumulate in size before the retail traders work out silver is turning bullish. Professional traders work with new lows, retail traders work with higher lows, hence they are late to the turn.
When the professional traders encounter bullish news they allowed price to rip higher as fast as possible, to simply frustrate retail traders trying to enter with size. Hence the retail trader is late to enter and the conditions to enter in size is frustrated by professional moving price too quickly (gaps, pull backs, spikes).
Purple Numbers
(1) and (2) are repeating the black (1) and (2) swings. Forming a bear trap (well so far). Short term interest rates trends are the same, moving higher and peaking.
As we roll into 2023 growth and deflation concerns will pressure short term interest rates lower, allowing (3) and (4) to build. At the first sign of bullish news the professionals will allow price to rip higher before the retail trader can jump on board with any size. Once again the retail traders profit chances are limited by the professional.
Rinse and repeat.
Chart 1
Chart 2 - When the fiat currency (US Dollar) interest rates fall the metals do well.
Chart 3 - A inflation crash is near. Falling inflation is less pressure on interest rates. More so when growth falls as well. Watch the US PMI's in the next 3 months.
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