Submitted by Stewart Thomson:
At this point in time, silver is my “metal of choice” for fresh buys. After bursting above the black downtrend line, the breakout was confirmed by a 14,7,7 Stochastics series crossover buy signal. It’s normal to take several weeks, or even longer, for intermediate trends to really get going, after such buy signals appear on a chart.
Amateur investors have a tendency to want to rush things a bit, and then throw in the towel just as the real move gets underway.
Silver looks superb at this point in time, and the budding breakout in financial stocks may be the surprise catalyst that makes every silver investor’s upside dream come true!
Silver Bullet Silver Shield Slave Queen Medallion at SDBullion.com!!
1. Gold functions like an alarm clock. A rising gold price usually indicates that financial uncertainty and volatility are the dominant market themes.
2. Inflation that begins to get out of control can cause the price of gold to rise almost vertically, but during the transition period from deflation to inflation, bank stocks and financial companies tend to be the best leading indicators.
3. Please click here now. You are looking at the monthly chart of the XLF financial sector ETF. The $16 area is one of strong resistance.
4. A correction is to be expected, but there are signs that the financial sector is on the verge of a substantial trending move to the upside.
5. Please click here now. I’ve highlighted a large bullish ascending triangle in green. Note the blue circle around the current price. XLF appears to be trying to stage a breakout.
6. The target of the triangle pattern is roughly the previous highs in the $26 area.
7. If financial stocks begin to surge higher, it would likely signal an end to deflation, and a beginning of inflation. That would be very good news for your gold and gold stocks.
8. I’d like you to take a closer look at the current price action of financial stocks. Please click here now. You are now looking at the XLF weekly chart, and I’ve highlighted an upside breakout from what appears to be a truly monstrous inverse head and shoulders pattern.
9. That breakout suggests that a “reflation of the world” theme is probably now set to replace the deflationary mindset held by most investors.
10. In regards to gold: “People seem to be universally bullish, but the price isn’t moving…” – Reuters News, Jan 8, 2013, quoting Ross Norman, the top-ranked LBMA gold forecaster.
11. Ross has a good track record, but I have some concerns about his view that most people are currently bullish about gold.
12. He’s obviously correct that the gold price is stuck in a quagmire, but rather than “universally bullish”, I see most investors as bearish and demoralized.
13. Please click here now. That’s the latest Hulbert “Gold Sentiment Chart”. He surveys a large group of gold timing services.
14. I see overwhelming bearishness on that chart. Hulbert uses his survey as a contrary opinion indicator, and it has a superb track record of calling intermediate term movements in the gold market.
15. Silver is the metal most likely to benefit from a “reflation of the world” theme. Platinum and palladium should also do well.
16. If you have 100 units of risk capital to allocate to the metals market, I think 70 units for gold and 30 for silver is a good way to handle real risk and potential reward.
17. Reflation can lead to hyperinflation, and gold is the metal you want to hold the most of, in such an environment.
18. Central banks tend to take very drastic action when inflation starts to go out of control, and that can hurt metals like silver, platinum, and palladium.
19. Regardless, it’s silly to worry about the popping of an inflationary bubble when it is just beginning to get inflated!
20. At this point in time, silver is my “metal of choice” for fresh buys. Please click here now. That’s the daily chart for silver.
21. After bursting above the black downtrend line, the breakout was confirmed by a 14,7,7 Stochastics series crossover buy signal.
22. It’s normal to take several weeks, or even longer, for intermediate trends to really get going, after such buy signals appear on a chart.
23. Amateur investors have a tendency to want to rush things a bit, and then throw in the towel just as the real move gets underway.
24. Silver looks superb at this point in time, and the budding breakout in financial stocks may be the surprise catalyst that makes every silver investor’s upside dream come true!
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St
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Quote: “Reflation can lead to hyperinflation, and gold is the metal you want to hold the most of, in such an environment.”
No, in the coming hyperinflation, Silver is the metal you want to hold the most of. In the next hyperinflation, Silver will be money again alongside Gold, and the value ratio will increase for Silver to 16:1 vs Gold at a minimum.
You are correct Plebian, SILVER is the best defense against hyperinflation. Hyperinflation or not, silver’s 50:1 or 60:1 ratio vs gold is queerer than a 3 dollar bill. That ratio HAS to decline over the years, so it’s impossible for gold to outperform. The ONLY and I mean the ONLY thing about gold that is better than silver is that it is more “value dense” than silver is. By that I mean you can fit $1 million gold in a suitcase, but $1 million silver requires a dolly, a very strong person who is gym certified, and a vehicle with fully inflated tires. It’s a pain in the ass to move around large amounts. That’s it! On the other hand, 1 oz silver rounds and “junk” (I prefer Constitutional silver) make PERFECT money. 1 oz of gold is too much for 99% of transactions. So there you have it. All the fundamentals are in silver’s favor. The only reason you could possibly like gold more at $1660 vs $30 silver is that if you wanted to move more than a few million of silver you’d need a really big truck. But price will change all that. I will gladly deal with the heft because silver will be in triple digits USD before gold is $5000, you can write that down, I’m sayin’ it.
I think you RIGHT , Hi O’ Silver and AWay! in the meantime i’ll round up a Posse and after those (scoundrels) lucifians
This is shameful and disgusting…..
All current legislators(?) need to start 2013 by
attending some real CIVICS and GOVERNMENT
classes – and NOT at any of those
Socialist schools~~~~
I think silver is stuck at $30 until such time as the banks close.
On the next leg up it will be black market setting price.
Just like their dark pool stock trading now
ClintZ,
Been doing a lot of thinking about Gold and Silver Let us realize that our new Socialist U. S. government can do just about and all about anything they want to do. Suppose the this government all of a sudden sets a static price on Gold and Silver and forbids selling, trading, importing or exporting the metals and states that it is only worth face value? What would happen then? Afterall they want to take away our guns, delete the twenty second amendment and pursue more reduction of our privacy and freedom? So what would you say that would stop that from happening with all the other OREO events?
I saw an eagle, fly south over a grinning toad. It must be a sign. Now to read my tarrot cards and then onto my bones. Chart readings are mumbo jumbo nonsense. Hard facts and economical mathematics if you please, leave the fortune telling to the Central Banks. We are scientists.
All I am waiting for is WHEN? Been sitting on my stack for years and all I hear is the GURU”S sitting on the side of the bed still, telling is how great it’s gonna be!
Even if we did know the algorithm :
The Mayan calander is ending somewhere in here + 5 years / – 0
And those guys forgot to write down that there’s a cliff at the end….
ClintZ
You don’t know how right you may be.The Mayans calculated that there were 365 point something days in a year and came up short just by a little bit. Little bit can add up over a 26,000 year period. Maybe in less than 5 years. I am not going to try that calculation whatsoever!
Everybody needs to calm down about silver. Just make sure you actually own some, and the more you have, the richer you will be. Silver went to $21 in early 2008 and it took 2 and a half YEARS before it was back in the twenties again and then making the huge rally to $49. If silver wiggles around for a few more months at $30 that’s ok. If it drops $3,4,5 and tests the low that’s ok. If it pops to $35 next week, that’s ok. Let’s keep it simple folks. You want to have silver. If you have it you are fine. If you think you need more, you probably do. If you can’t afford more, that’s ok. Taking care of family is always Job One if you are doing that you are grand and good. There is more to life than money. Food, shelter, and sometimes medicine for example. Oh but you need money for that you say… At $30, even restaurant workers can afford to stack regularly. Don’t go beyond your means, like all people ideally should try to behave. Make a feasible plan and stick with it. This is all going to work out well for us.
These mining stocks will not be penny garbage in another year or so. I was looking over one today in West Africa with 5M ozs and growing that is near infrastructure plus they have 8 other properties of some merit. The stock is 50 cents and market cap of $75M and they have $20M cash and not burning it very fast. There’s a company in Arizona with about a quarter billion ozs of silver and it will cost $600M to build the mine that pays back in under 2 years at $28 silver. The mine life is almost 2 decades and will produce 15M oz first 5 years. This stock has market cap of well under $1 per oz silver. The NPV is almost $2B at current silver price and at $40,50,60,70 silver the NPV balloons to many many billion. It’s crazy out there now, it’s easy to find companies trading at 1/4 of NPV. Just stick to ones that are funded well and cash flowing. Exploration companies can run out of money. They can also go from trading at 5-10% NPV to NPV parity and it will happen again like after the 2008 debacle.