Hey Atina,
I've actually gotten much better at making microfoam, which proves that it's just due to practice. You can see that I started this thread because I didn't know what I was doing. At the bottom of my post is a picture of one of my more recent cappuccinos. So hang in there, it'll get easier. Disclaimer: I'm far from perfect.
When I'm stretching the milk (the first phase) I keep the wand angled next to the spout of the pitcher but have the tip a little towards the center. I make sure that only the tip is in so that I can hear that chirping sound. Once I get to about 80 degrees F I move the tip and the wand closer to the spout of the pitcher (it's not quite completely parallel to the side of the pitcher, but moreso than before) and I put it in about the same depth about as you do. Just move the wand around a bit until you see the milk swirling pretty fast. Don't be afraid to change the position of the wand over time. If you hear chirping, your wand isn't deep enough.
Also the point of the second phase, when you put the wand deeper into the milk, isn't to break up the bubbles but to mix it around with the rest of the milk so that the foam is evenly distributed in the liquid. I keep my steam knob fully open the whole time. I've read that you won't get good foam unless you have the full power of the steam going into the milk.
Lastly unless you have a PID, make sure you're temperature surfing the steam wand as well as when you brew. Time how long it usually takes from the time you press the steam button until the light goes off. You want to start foaming the milk right before that light goes off in order to get the most steam out of the Silvia.
I hope this helps.
