Expectations for silver moving forward from May 2011

[Sparky]

Listen, those who have ears!

It looks like we have entered the 4th major parabolic break in this decade-long silver bull. Looking back at the three previous breaks provides clues for the future. Namely:

1) April 2004: $8.30, broke to $5.50 in May 2004 (-34% in 1 month), and didn't reach $8.30 again until December 2005 (20 months after the previous peak).

2) May 2006: $15.00, broke to $9.75 in June 2006 (-35% in 1 month), and didn't reach $15.00 again until November 2007 (18 months after the previous peak)

3) March 2008: $21.00, broke to $9.75 in October 2008 (-54% in 7 months), and didn't reach $21.00 again until September 2010 (30 months after the previous peak)

All three breaks occurred in the spring, they all resulted in at least a 1/3 drop of the interim peak price, and they all took more than 18 months to recover back to the peak price. There have been no changes in fundamentals, so this seems like a good road map for the future.

We peaked at $49.85, so we should now expect a break to at least $33 within the next month; it also leaves open the chance (though less likely) for a further breakdown to the $25 area by the end of the seasonal down period that is coming up over the next several months into autumn.

We really shouldn't expect to make a serious run back to $50 silver until some time in the November 2012 to May 2013 seasonally favorable time frame.

So pull up a chair. If you are a trader, sell the rebounds until we approach $33. After that, any additional major surges can also be partially sold, knowing that we aren't going to new heights for quite some time, and then re-bought at lower prices. If you're an accumulator, look for good opportunities in the mid-$30's and lower.

On the bright side for silver prices, once again this break has occurred with all fundamentals still in place, so the long-term secular bull is not over. We're probably still good for a future run to $75 in 2013, and then perhaps yet another run beyond $100 during the middle of the decade, which would probably end the secular bull.

[Neuro]

I'll say that things are accelerating, which the recent run up attest to. I think we will see a v-shaped graph on silver with the bottom sub 25 in July, back up in the 40's during autumn, trying the $50 barrier a couple of times in December/January, break through in January/February, and over a $100 in April/May 2012. Technical pullback to $50 in June/July because people remember the last brutal summer pullback. Back to $100+ by October November 2012, getting turbocharged after that, hitting $250-400 in spring 2013, holding that over the summer, and then hyperinflation to infinity...

[Sparky]

Sweet! ;)

[bl96S5eu]

This may be the summer to go for an AOR (http://en.wikipedia.org/wiki/App-o-rama) and lot o' debt, get those low % fixed rates for a year while the going is good boys.

[Sparky]

As a follow-on, I was thinking about how this plunge impacts people here, since most are long term bulls.

If you bought silver for SHTF survival or financial collapse, this move has no impact. Nothing's changed on that front.

If you bought silver for long term buy and hold for financial gain, this move tells you that the end is not near. The outcome will still be the same, but this means more patience will be required for your payoff. So any angst would only really be associated with impatience or lack of time available to wait.

If you are a trader, you're impacted if you bought near the high, or held through the high. Yep, that was the opportunity for this cycle. Now the opportunities will be smaller scale for a while. We'll probably zig-zag our way down to $26-$33, zig-zag our way back up to $40, zig-zag back down to $30, etc. So the traders will have to play the zig-zags, or the longer $10 swing points.

But as for the long term outlook, that's not changed. I think the main question is how many more cycles are left before the longwave uptrend is over. At least one ($75?), maybe two ($100?), remote chance of three (to the moon?).

I sense some angst out there. I'd be interested in hearing why. Is it mostly over "nominal" losses in your holdings? I'd guess most of us think that the bull far from over.

[steyr_m]

I'll say that things are accelerating, which the recent run up attest to. I think we will see a v-shaped graph on silver with the bottom sub 25 in July, back up in the 40's during autumn, trying the $50 barrier a couple of times in December/January, break through in January/February, and over a $100 in April/May 2012. Technical pullback to $50 in June/July because people remember the last brutal summer pullback. Back to $100+ by October November 2012, getting turbocharged after that, hitting $250-400 in spring 2013, holding that over the summer, and then hyperinflation to infinity...


Hope I don't sound too doom & gloom, but I'd hate to see silver at $1,000 per ounce when a weeks groceries are $2,000.

[Shami-Amourae]

We are entering the insanity phase. No rational thinking is practical any longer with these markets as manipulated as they are. Just hope for the best IMO and don't sell your stack.

[Neuro]

I'll say that things are accelerating, which the recent run up attest to. I think we will see a v-shaped graph on silver with the bottom sub 25 in July, back up in the 40's during autumn, trying the $50 barrier a couple of times in December/January, break through in January/February, and over a $100 in April/May 2012. Technical pullback to $50 in June/July because people remember the last brutal summer pullback. Back to $100+ by October November 2012, getting turbocharged after that, hitting $250-400 in spring 2013, holding that over the summer, and then hyperinflation to infinity...


Hope I don't sound too doom & gloom, but I'd hate to see silver at $1,000 per ounce when a weeks groceries are $2,000.
Regret your erroneous thinking and check into a FEMA work camp for free food and board. Big brother will take care of you.

[SilverMagnet]

With all due respect, the paper spot price is irrelevant to the actual physical markets which are drying up. I'm not really seeing that being addressed in this thread yet. Crimex can continue raising the margins citing volatility as their reasoning but everyone knows that the emperor has no clothes. Inventories are at all time lows:


http://www.zerohedge.com/sites/default/files/images/user5/imageroot/bernanke/Comex%20silver%205.3_0.jpg

and the intended shakeout of weak hands has only backfired as more and more are demanding physical.

A rotting piece of wood can be painted over and over again, but eventually the paint peels and the viewer notices that the paint isn't doing any good any longer as it eventually falls apart. The FR and Crimex are backed against the wall. This was an act of desperation at prolonging the structural integrity. Erosion has not been stopped, only slightly delayed.

At the same time, watch real, physical silver and gold rise and rise and rise... as fiat, fake, fraud, fiction, fantasy, fractional-reserve debt-ball-and-chain paper dollars crash and burn along with many other paper games.

[Sparky]

SilverMag, what you say is fundamentally true, but it's been true for many years; nothing's new here. Yes, eventually things may blow up, but we could have said that in 2004 and 2006 and 2008. Of course, we're closer to the "end", whatever that may be, but only because time moves forward.

In 2008, when silver dropped from $20 to $10, there were no silver rounds to be had. You could have made the same argument, that the scarcity of physical was an indicator that "things are different". They're not, at least not yet.

We talk about COMEX deliveries; I'm still not convinced anyone here knows what the hell that means. When I looked into this two years ago, it basically meant that piles of silver bars were moved from one room into another room, and labeled as something else. They make the freakin' rules; who knows their level of vulnerability to default? This same argument came up in 2008.

It's the same BS. Soros sells, and then announces he's out. When the price gets low enough, he'll buy back, and then announce it. And the game will resume. Talk to me when something new happens. I think the "event" we're looking for is still several years away.

[JJ.G0ldD0t]

I think the "event" we're looking for is still several years away.


Sparky-

SilverMag put into words and pictures what I have neglected to spell out as the reasoning behind my uncertainty.
It's the same BS- ' till it's not.

Your analisis is rock solid from a historical and fundamental standpoint. Your last statement is where I am experiencing disquiet in my train of thought.

There are those of us who, in comparison to the old time bulls, are relatively new to this game. The expectation for an economic collapse has been there for a long time, yet the moneymasters keep finding a way to float it. I will readily admit naivety with regard to paper silver and COMEX issues on my part, therefore I don't know WHAT to expect. I do however do what I can to keep educated on the state of affairs and that leaves me with less hope than what you apparently hold to.

Mortgage messes
Bubbles
Dirty Banking
Offshoring
Jobs
No Manufacturing base
Sinking Dollar
Shrinking food reserves
Derivatives games
Nationial debt... to CHINA


I know you're aware of all that... yet the question is - and will remain "how much longer will this go on?"
As I said- we've been looking for it for so long - we won't be surprised when it gets here- or will we?

Any angst on my part is rooted in this. That said, yeah, I see a buying opportunity. ;) IF I can find any :o

I always appreciate your posts and read them with great interest.

[Sparky]

JJ... I hear what you say; let me re-state a little bit to clarify.

You have a valid list of issues that are pointing to a known problem that very likely could end with a dislocation of markets and the financial system as a whole. I agree with that.

But most or all of the 10 items on your list existed 10 years ago, and are simply growing worse. It's a big reason gold went from $250 to $1500, and silver from $4 to $49. Yes, I agree that there's a breaking point. You're saying we're accelerating toward it, so we must be close to it. I'm saying we're accelerating toward it, but I don't know how close we are to it. If I've run 15 miles in a marathon, I've run a long way, but I still have a long way to go.

So I'll agree that at some point, the old rules will change and could have a dislocation. It might even been soon. But I don't think it is, because there are lots of strings that can still be pulled by those who want to delay it as long as possible. So although I think we should all be prepared for a dramatic change that could happen at any time, I think also be in the mindset to deal with each new cycle. This might reduce some anticipation anxiety. If silver drops to $25, the implications of your list won't change. I tell myself that ahead of time so I won't be caught up in the sentiment when it's happening. Just like the current plunge. Who's really surprised at this? It's completely consistent with the last 3 cycles, so why shouldn't I think it's just the next cycle playing out? Though, to your point, I could be wrong, so I of course agree with remaining prepared and vigilant.

[Neuro]

Great points from both Sparky and Golddot! Yes I think we are accelerating towards the end of their games, but we were accelerating towards it in 2008 also, I really believed they were done for back then. But they came back, at least on the paper stronger then ever. Many people here thought the master manipulators were done for as price of silver were rising towards $50, many even mentioned a "new paradigm", which is a signal it is about time to sell whatever commodity or stock, that is talked about entering a new paradigm. This was often mentioned late '99 or early '00 in regards to Internet stocks... I doubt very much though that this was the last leg up on the PM rally, the underlying reason, the inflation and subsequent coming collapse of fiat currency is still there... However, they can probably prop up the game way more. For instance you saw Obama, get away with a complete fake bc, and a complete fake killing of Osama. The bankers behind him is obviously smarter than that. The thing is you can pretty much fool almost everyone everytime, but not forever...

[Sparky]

It also annoys me to see the headlines saying that the PM bubble has burst. To me, the bubble has not burst until the generational high has been achieved, like tech stocks in 2000 and housing in 2007.

The fundamentals changed for tech in 2000 when everyone owned tech, 95% of internet stocks weren't making money and didn't have a viable business plan, and the successful companies were required to continue to grow at 30% indefinitely.

The fundamentals changed for housing when subprime lending became pervasive and it became evident that the high risk was not being rewarded in bond premiums.

The fundamentals for silver and gold haven't changed. The only significant difference is the accelerating margin requirements. If this continues, it could smother the paper market, which would dampen and delay advances in the physical market. But unless they stop excessive debt and quantitative easing and raise interest rates to double digits, the fundamentals remain in place to resume the upward move at some point in the future.

[cthulu]

But unless they stop excessive debt and quantitative easing and raise interest rates to double digits, the fundamentals remain in place to resume the upward move at some point in the future.


Or they enact some kind of north american union-european union financial system hybrid. we sampled a little bit of it when the bernanke made a ton of loans to european central banks.


http://www.bloomberg.com/news/2011-04-01/foreign-banks-tapped-fed-s-lifeline-most-as-bernanke-kept-borrowers-secret.html

[oldmansmith]

Great OP Sparky, glad you are here. To answer your question I have no angst. Bought my first maple for $11 and am mostly in the teens for cost. I did buy some generic at $31 and some ATB coins for more than today's spot, but I don't care.

I thought that it COULD keep going up. One day it will. Do you think gold will ever be below infinity Zimbabwe dollars again? But i've seen enough crashes to know it could happen, and it did.

To anyone who bought on the spike to $50 don't feel bad. How would you feel if you bought your first gold at the first rhino horn to $700, only to see it drop into the $500's? That was me. What a moron I felt like...not so much now! Hold and keep buying to dollar-cost average.

I have a bunch of FRN's and if I can distract Mrs. Old it looks like it will be a good buy more when (and if) premiums settle down.

[Luis337]

I'm feeling inclined to buy due to personal problems at home. I'm pretty sure that if I don't spend the PM money it will slowly disintegrate as that's exactly what's happened to my original PM goal of $4,000. It's down to $2,500.

I'm wondering whether to buy an ounce of gold and the rest in silver, or all silver. I don't have much of either of those.

[SilverMagnet]

Talk to me when something new happens. I think the "event" we're looking for is still several years away.


Spark, did you notice the chart? Did you see the downward trend in inventory supply from mid 2008 on? Another "new" aspect is investor demand has increased most likely to the technological information age which has informed many people on the banking schemes. For example the Max Keiser buy "physical" Silver crash JP Morgan campaign.

Even with these recent margin hikes, Silver demand has not gone away. The game is up. The paint has peeled and more people see the fraud for what it is.

Thanks for the responses and acknowledgment of my points.

[ximmy]

I'm feeling inclined to buy due to personal problems at home. I'm pretty sure that if I don't spend the PM money it will slowly disintegrate as that's exactly what's happened to my original PM goal of $4,000. It's down to $2,500.

I'm wondering whether to buy an ounce of gold and the rest in silver, or all silver. I don't have much of either of those.


Buy 1 ounce GAE... the rest silver... the ATB coins are killer deals right now, you can get 4 of them.

http://www.providentmetals.com/bullion/silver/us-slv/america-the-beautiful-5-oz.html

[osoab]

I'm feeling inclined to buy due to personal problems at home. I'm pretty sure that if I don't spend the PM money it will slowly disintegrate as that's exactly what's happened to my original PM goal of $4,000. It's down to $2,500.

I'm wondering whether to buy an ounce of gold and the rest in silver, or all silver. I don't have much of either of those.


You never bought last fall? Dude!

[Luis337]

Thanks Ximmy for the tip. I found this btw.

http://www.gainesvillecoins.com/products/154870/MadeInTheUSA1troyozBarfinesilver999%2bpleaseallow1 0-13businessdayspriortoshipment.aspx

generic silver for $1.10 over spot.

nope osoab I definitely should have.

[ximmy]

Thanks Ximmy for the tip. I found this btw.

http://www.gainesvillecoins.com/products/154870/MadeInTheUSA1troyozBarfinesilver999%2bpleaseallow1 0-13businessdayspriortoshipment.aspx

generic silver for $1.10 over spot.

nope osoab I definitely should have.


You should have already completed your transactions...
We all need to learn individually & head advice to a minimum... for what it's worth...
OK... Everything I recommended will probably hold premium, generic does not...

Ex. http://cgi.ebay.com/2010-5oz-silver-America-Beautiful-PCGS-Choice-BU-FS-/320695037224?pt=Coins_US_Individual&hash=item4aaae9ed28

Ended: May 06, 2011 after crash price $1650.00

http://cgi.ebay.com/2010-America-Beautiful-5-Oz-PCGS-BU-1st-Strike-Set-/330557633648?pt=LH_DefaultDomain_0&hash=item4cf6c53470

Ended april 26th before crash price $1600.00

Do your own homework... but get rid of those FRN's, pronto, before they are gone too (you spend it on shit)... PLEASE...
PM "Neuro" if you think I am full of shit... We (neuro & I) disagree, that's why I recommend you PM him about my advice.
??? :o :( :-[ :-X :-\ :'( ... :)

ximmy

[silver solution]

SilverMag, what you say is fundamentally true, but it's been true for many years; nothing's new here. Yes, eventually things may blow up, but we could have said that in 2004 and 2006 and 2008. Of course, we're closer to the "end", whatever that may be, but only because time moves forward.

In 2008, when silver dropped from $20 to $10, there were no silver rounds to be had. You could have made the same argument, that the scarcity of physical was an indicator that "things are different". They're not, at least not yet.

We talk about COMEX deliveries; I'm still not convinced anyone here knows what the hell that means. When I looked into this two years ago, it basically meant that piles of silver bars were moved from one room into another room, and labeled as something else. They make the freakin' rules; who knows their level of vulnerability to default? This same argument came up in 2008.

It's the same BS. Soros sells, and then announces he's out. When the price gets low enough, he'll buy back, and then announce it. And the game will resume. Talk to me when something new happens. I think the "event" we're looking for is still several years away.
I could have bought all the rounds I wanted if I had the bucks. You just needed to buy very larger amounts. No credit card just bucks.

[Neuro]

Thanks Ximmy for the tip. I found this btw.

http://www.gainesvillecoins.com/products/154870/MadeInTheUSA1troyozBarfinesilver999%2bpleaseallow1 0-13businessdayspriortoshipment.aspx

generic silver for $1.10 over spot.

nope osoab I definitely should have.


You should have already completed your transactions...
We all need to learn individually & head advice to a minimum... for what it's worth...
OK... Everything I recommended will probably hold premium, generic does not...

Ex. http://cgi.ebay.com/2010-5oz-silver-America-Beautiful-PCGS-Choice-BU-FS-/320695037224?pt=Coins_US_Individual&hash=item4aaae9ed28

Ended: May 06, 2011 after crash price $1650.00

http://cgi.ebay.com/2010-America-Beautiful-5-Oz-PCGS-BU-1st-Strike-Set-/330557633648?pt=LH_DefaultDomain_0&hash=item4cf6c53470

Ended april 26th before crash price $1600.00

Do your own homework... but get rid of those FRN's, pronto, before they are gone too (you spend it on shit)... PLEASE...
PM "Neuro" if you think I am full of shit... We (neuro & I) disagree, that's why I recommend you PM him about my advice.
??? :o :( :-[ :-X :-\ :'( ... :)

ximmy
Ximmy, I think you gave good advice. His situation is that he lives close to a black hole, that sucks out the cash intended for financial security, without having much of it to begin with. 1 ounce of gold is good, I don't think there is much of downside to that, and with Greece leaving Euro, if the rumor is true, we may have a summer of currency turmoil... Personally I am not much of a numismatic type of investor, but I don't think it is a bad idea to buy some silver at this point if you don't have much. I have sold most of my investment silver granule, for USD and gold bars, but I still have plenty of deep storage junk coins, silver jewelry and silver ware. If I lived in the US I would get a small bag of pre-64 dimes and quarters, for the remaining cash, not the purdy coins! Save a couple of hundred dollars to stock up on dry food, like pasta, rice and beans, and some cans...

Get out of the cash

[Neuro]

Just checked APMEX $30 face value of dimes and quarters would set you back about $800 ($26.88/dollar)...

And they have it for immediate shipping!

http://mobile.apmex.com/product/195/9025-Silver-Coins-241-Face-Value

[chud]

If you're an accumulator, look for good opportunities in the mid-$30's and lower.


Agreed. Friday was a buying opportunity.



On the bright side for silver prices, once again this break has occurred with all fundamentals still in place, so the long-term secular bull is not over. We're probably still good for a future run to $75 in 2013, and then perhaps yet another run beyond $100 during the middle of the decade, which would probably end the secular bull.


Nice! Thanks for sharing your analysis Sparky.

[Sparky]

Listen, those who have ears!

It looks like we have entered the 4th major parabolic break in this decade-long silver bull. Looking back at the three previous breaks provides clues for the future. Namely:

1) April 2004: $8.30, broke to $5.50 in May 2004 (-34% in 1 month), and didn't reach $8.30 again until December 2005 (20 months after the previous peak).

2) May 2006: $15.00, broke to $9.75 in June 2006 (-35% in 1 month), and didn't reach $15.00 again until November 2007 (18 months after the previous peak)

3) March 2008: $21.00, broke to $9.75 in October 2008 (-54% in 7 months), and didn't reach $21.00 again until September 2010 (30 months after the previous peak)

All three breaks occurred in the spring, they all resulted in at least a 1/3 drop of the interim peak price, and they all took more than 18 months to recover back to the peak price. There have been no changes in fundamentals, so this seems like a good road map for the future.

We peaked at $49.85, so we should now expect a break to at least $33 within the next month; it also leaves open the chance (though less likely) for a further breakdown to the $25 area by the end of the seasonal down period that is coming up over the next several months into autumn.

We really shouldn't expect to make a serious run back to $50 silver until some time in the November 2012 to May 2013 seasonally favorable time frame.

So pull up a chair. If you are a trader, sell the rebounds until we approach $33. After that, any additional major surges can also be partially sold, knowing that we aren't going to new heights for quite some time, and then re-bought at lower prices. If you're an accumulator, look for good opportunities in the mid-$30's and lower.

On the bright side for silver prices, once again this break has occurred with all fundamentals still in place, so the long-term secular bull is not over. We're probably still good for a future run to $75 in 2013, and then perhaps yet another run beyond $100 during the middle of the decade, which would probably end the secular bull.

Was just taking a look at this prediction post from almost 14 months ago; this post was made six days after the $49 peak, when silver had dropped to $39. I've highlighted the specific price predictions here in bold. I think they were pretty much on track. Sure enough, the price did drop to $32 on May 12, and ultimately it did hit bottom at $25.99 on September 26.

And we have gone through our long period of required patience to consolidate after such a spectacular run in price. We survived a couple of beat downs to the low $27s last month. I think we'll probably go through one more some time over the next month or so; we may have seen signs of that today as we touched $27.60. I think either we'll scrape along the low $27s, or we'll get one capitulation shocker in the $25-$26 range to shake the trees one more time before we can begin the next ascent. Patience.

[Skirnir_]

I expect that the innumerable silver atoms that comprise the various bars and coins in my hoard to not spontaneously degenerate. That is all that is needed.

[Twisted Titan]

They can slam it anyway they want ........ Im a net buyer until I cant afford it or nobody is willing to sell it.

Simple.

[ximmy]

If these bargain prices last into mid July I can make a substantial purchase... {**}

[gunDriller]

in May the Cartel managed to manipulate paper Silver into the 26's.

now they have 6 weeks until the next Fed meeting in early August.

i think they'll make a run for the 25's.

[ximmy]

Sweet! Wonder how long until the dealers say "Temporarily out of stock"

[Xizang]

Word has it that lots of dealers are doing exactly that. Can't blame them.