Thursday, April 7, 2011

Crash JP Morgan And Burn

JP Morgan is on the gallows. Don't be distracted by the $20.8 million hauled in by bankster in chief Jamie Dimon, in a few shorts months Morgan will have gone the way of it's behemoth brethren Bear Stearns and Lehman Brothers. And what a mighty crash it will be.

I can't tell how much credit Max Keiser's Crash JPM Buy Silver campaign, but a look at the chart of JP Morgan shows what looks like the beginning of the end for the corrupt captain of crony capitalism.

The 52 week high of $48.36 was hit back in April of last year, then it broached the $48 mark again this past February and this is where it gets interesting. Notice how it has been turned back from the $48 mark these past two days. So what? Nothing by itself, but think of a seesaw with JPM on one side and silver on the other. Morgan's infamous silver short position has so far been able to keep the scales reasonably ballanced, but last month the creature increased it's silver short position by 6,000 contracts to 25,000 contracts on the COMEX. That's 125 million ounces during the last Commitment of Traders reporting week. And just how is that going for them? Well the silver has gone up by $2 per ounce since.

Why would anyone short silver into the teeth of this run? Because they are desperate to keep the price down and scales balanced. But the silver they short is paper and the silver that is being demanded for delivery is physical and this game can't go on for much longer. Who will win? I won't bet against physical silver.

The key to trading this short on JP Morgan will be to go short with half a position right here and keep the stops just above the 52 week high. We will add on the rest of our short under $46. If my guess is correct you can think of the seesaw, but this time the weights are marbles. So, the more one goes down the faster the other side rises. That other side is JP Morgan. Soon after the price of silver per ounce exceeds the price of a share of JPM the scam will unravel and there will be one less ponsi bank on The Street.

Don't feel to bad for Dimon though, we've seen this movie before. Dimon will keep his haul leaving the taxpayer to hold the bag.

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