Let’s get something out of the way quickly: yesterday wasn’t the end of the move. It was the market punishing late money and cooling an overcooked trade.

If you glanced at silver last night and felt your guts turn to water, congratulations! You just experienced a classic rite of passage in a metals bull market. Honestly, I was more confused than scared. With a low of 101.98 and a high of 117.74, yesterday’s range was long. Like, War and Peace long. Now, that’s volatility!

But as I write this at 4:24 am ET, spot silver opened the Asian session at 103.92, a few ticks higher than yesterday’s close. Now, it’s 112.33. This is why it’s imperative to “keep your head when all about you are losing theirs,” as Kipling once told us.

Yesterday gave us a monster surge, and then a sudden stall. Next came the hairpin reversal. Futures volume reached over 312,000 contracts. And SLV? Its volume was over 393 million contracts, about 15 times the usual volume. It traded more than the SPY ETF. A busy day, to say the least.

We’ve entered the part of the cycle where price stops rewarding excitement and starts rewarding patience.

Silver got the wind knocked out of it. That’s all. And to be honest, that’s good.

What Yesterday’s Moves Mean

Silver went vertical for weeks. When markets move like that, three forces show up.

The Crowd

Every breakout buyer and momentum fund eventually piles in near the highs. That’s a setup where there are more potential sellers than new buyers.

It’s key to note that if a futures trader sold silver at yesterday’s high and closed out anywhere near the lows, it’ll be the biggest one-day trade of his life. For the guy on the other side of that trade, he just lost his house.

Bots Don’t Love Their Trades

This is bigger than emotion. Index rebalances, systematic funds, and model-driven strategies are price-insensitive. When silver rips this hard, those programs automatically shift from buyers to sellers. Talk of a multi-billion-dollar index-linked futures sell program equal to a chunky slice of COMEX open interest is exactly the kind of flow that halts upward momentum in its tracks.

Parabolic Structure

There’s no such thing as a soft landing. Blow-off moves don’t glide into new bases. They overshoot, reverse, and thrash around while the market digests the leverage.

Near term, the most probable path is more probing lower, sharp countertrend bounces, and sideways churn while the froth gets skimmed off.

But the options market exacerbates these moves.

Under the Hood

My colleague and resident Paradigm options expert Nick Riso did yeoman’s work yesterday by uncovering these stats, which he kindly posted in our editorial channel (bolds mine):

• There were 1,381 instances where two different exchanges traded the exact same contract at the exact same second for different prices. In the worst case, the price difference was $0.54. Normally, arbitrage bots fix price differences instantly. The fact that a $0.54 gap existed means the "police" of the market (arbitrageurs) simply walked off the job.

• For 12.3% of all trades today, the Bid-Ask spread was wider than $0.20. In a liquid ETF like SLV, the spread is usually $0.01. For large chunks of the day, investors were paying a 2000% markup just to enter or exit a trade. The "price" on the screen was effectively fake because the cost to touch it was so high.

• 47.5% of all trades (313,766 trades) were for exactly 1 contract. This was likely HFTs firing thousands of microscopic "pings" into the dark to find hidden buyers, creating the illusion of activity while providing zero real depth.

• Deep OTM Puts traded at an implied volatility of 222%, while OTM Calls traded at 202%. Even though traders were buying more Calls (betting on a bounce), the Market Makers were charging more for Puts. The "House" was terrified the crash would go deeper and priced the insurance accordingly.

In other words, the Big Boys were so confused that the market became meaningless. And who could blame them?

In fact, things got so bad yesterday, Goldman Sachs and its Head of Precious Metals Trading “parted company.”Methinks somebody shorted silver into this massive rally…