Before you dive too far into this missive, let me state this is NOT about call options on silver. I might address that issue at some point in the future, but this week's commentary is about how I have "called" the silver market.

In The Morgan Report published on March 3, 2008, in paragraph four, I stated the following: "We expect to see a quick and solid spike high within the next few weeks. It may come as early as a few trading days from the date of this publication. First, we base this on the fact that the Commitment of Traders report in silver is showing us caution based upon countless previous experiences."

You might go back and check to see what others were stating at that time. Most were claiming we had far higher to go. If you doubt that statement, we invite you to visit the archives on our Web site.

In April 2008 I stated in paragraphs three and four, "March was one of the most volatile months for the precious metals ever experienced in modern history. Gold breached the $1,000 level and in a matter of days had fallen more than $100. Silver moved above $21 per ounce and fell even harder, hurting some folks who use leverage to trade these markets.

"This is the main point: the fall is driven mainly because the price of precious metals is determined in a leveraged atmosphere. As hedge funds panic and sell, the commercial traders in the precious metals let out a huge sigh of relief as they are able to cover their short positions. Our sources indicate that many in the 'hedge fund' community were urged to sell."

What about the May issue? Here is what I stated for our paid subscribers:

"Last month we focused on the probability of the current corrective phase in the precious metals. Some are still of the opinion that the correction is almost over and we can expect to see silver and gold move toward their recent highs in short order. We do not see that taking place and expect at least a three to six month corrective phase to develop."

In the June 2008 issue of The Morgan Report, market direction was not really mentioned; however, I did make this comment, "The market provided tons of information to comment upon this month, but I want to keep it brief since much is available for free on the Internet. The CFTC sent another message that they see no manipulation in the silver price. I commented on this, as did other silver commentators, so if you missed it, please check the main Web site. The thrust of my public article was that the amount of silver on paper is about 100 times the amount of physical silver, and the silver derivatives are potentially a problem area in the future."

As far as I am concerned, that day has arrived, and there is some disconnect between the futures market (derivatives) and the physical silver market. This can be verified because the spreads between the paper price and the physical price are so wide; see last week's article for more information.

On the first page of my July 2008 report I stated, ". . . I suspect a sharp and hard move to the downside, similar to last year, that will take all markets down, including the mining shares and the metals." Emphasis mine!

Did I call the silver market perfectly? Of course not, but you can judge the calls for yourself. I will leave you with the fact that the market can humble all of us, and the damage the market has done to my paid readers is significant at this point. But I did my best to call the market as I saw it, and many subscribers have written to me in appreciation because some did take something off the table in March and are buying bargains now!

It is an honor to be,