Re: Silver Phase Transistion
London Trader - Massive Physical Silver Orders Filled Near $33
March 8, 2012
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The London Trader continues:
“The Chinese are doing the exact same thing in the silver market that they are doing in the gold market, massive accumulation on dips. It is also important to note that the local traders in silver are short and nervous. Everyone is short silver and so that market can move violently higher when it turns.
When silver reverses, it will be the one that leads the market higher. Also, the commercials have been covering in silver the same way they have been in gold....
Continue reading the London Trader interview below...
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“The physical silver orders that were just filled have been waiting since February 16th. Those orders near the $33 level were filled in huge size on Tuesday. These long-term accumulators are buying every dip. There were some fills at $34, but some very large orders were filled near $33.
As long as we stay under $34, there is going to be constant accumulation. What does it matter if you buy silver at $32 or $38, when it is going to go multiples higher from these levels? The Chinese know this and that is why they are accumulating in size.
What is happening here is essentially criminal, but the smart money is capitalizing on it by accumulating. They take advantage of the manipulation. Remember, a lot of this is spot indexing that will be converted to physical over the next few days.
These guys (bullion banks) are so naked short and the last thing they need is to have physical disappear at this time. This is the ammunition they have to drive the market lower and they don’t have very much ammunition.
Even in the virtual market they are running out of sellers they can cover into. There simply aren’t enough weak hands for them to cover in size and as I said, the last thing they need is for physical to be disappearing at these levels.
The real (physical) market is taking over now and the virtual (paper) market will not be as important going forward as the price of silver begins to rise again.”
Re: Silver Phase Transistion
I have received numerous emails asking about silver. This article was prompted by a question enquiring what the silver price might be if my gold forecast of $4,500 proved to be correct. As I own some silver bullion and a number of silver mining shares, the question caused me to pause and take a closer look at silver. The reason why I have written very little about silver in the past was because the beautiful Elliott Wave (EW) symmetry and predictable relationships visible in gold were not to be found in silver. I first wrote about silver in December 2003 in an article titled "US Dollar Implosion - Part II". The link to this article is at: www.gold-eagle.com/editorials_03/field120503.html. The brief piece on silver was tacked onto the end of that article. In view of its brevity, the 2003 silver piece is reproduced in full below:
SILVER
"In past crises, the wealthy protected themselves by purchasing gold and gold related assets. Ordinary people, by far the greater number, could rarely afford to buy gold. Being far cheaper, they previously had to buy silver. This metal became the poor man's choice as an asset to protect their savings. Silver has so far lagged gold in the early stages of this bull market, but that situation seems about to change."
"Throughout recorded history the average relationship between silver and gold has been 15oz silver to 1oz gold. The ratio at present is a far higher 75:1 ($400/$5.30). This is massively out of line. If gold were to double to $800 per oz, it would not be unreasonable to expect the silver/gold ratio to decline sharply, possibly as low as 40:1. With gold at $800, this would position silver at $20.
Thus a 100% increase in the price of gold could possibly be accompanied by a simultaneous 400% increase (perhaps more) in the price of silver. This offers significant opportunities both in silver bullion and silver mining shares.
The above graph of the price of silver has been borrowed from an excellent recent article by Dan Norcini entitled "A Technical Look at Silver - Update". What is quite clear from the graph is that silver's 22-year bear market down trend has come to an end. As Dan Norcini says, a new bull market in silver has been born. It is difficult to argue against this contention and I have no intention of doing so. A silver price above $6.80 would complete a fabulous head-and-shoulders base formation. With this as a foundation, it would be possible to project a very large rise in the price of silver for the future." - end of the December 2003 quotation.
Silver did reach $20.68 in March 2008 at the same time that gold peaked at $1003. The silver to gold ratio was thus 48.5 in March 2008. The lowest this ratio has reached is about 32, achieved at the end of April 2011 when gold was around $1570 and silver peaked in the $49 area. At that point gold had experienced a 6-fold increase from its bull market starting point of $255 while the silver price rose 12-fold from its bull market starting point of $4 in November 2001.
The quick answer to the question of what the silver price will be when gold gets to $4,500 is to pick your favorite silver/gold ratio and divide it into $4500. The current ratio incidentally is about 51. If you choose the lowest ratio achieved since 2001 of 32 that would produce a silver price of around $140 ($4500 divided by 32).
This is not a satisfactory answer, so I decided to approach the Elliott Wave analysis of silver from a different angle. Instead of working upwards using the analysis of the minor waves, which was the technique used in the gold calculations, what if we worked backwards in silver starting with the larger waves?
Gold and silver tend to move in tandem, not in an exact synchronization, but enough to suggest that the Major waves of both metals should coincide from a time perspective. We know that in gold the Major ONE wave peaked in March 2008 at $1003 and that Major TWO declined to $680 in November 2008.
Silver also had a peak in March 2008 at $20.68 and declined to an important low of $8.77 in November 2008. If we assumed that the peak at $20.68 in March 2008 was the end of Major ONE and the decline to $8.77 the end of Major TWO, how would the various percentages work out? When I did these calculations I was astonished at the relationships and wave counts that emerged.
The chart below is the monthly spot silver price shown in log scale so that the percentage changes are visible. The bull market started in November 2001 at a price of $4.02. From that point to the suggested peak of Major ONE at $20.68 there are five clear waves visible, marked 1-2-3-4-5. The prices at the various turning points are also displayed.
The analysis of the suggested Major ONE wave is set out in the body of the chart. The typical impulse wave relationships are immediately apparent. Both corrective waves 2 and 4 are similar (-33.7% and -35.9%). Whenever two corrective waves are similar it is a signal that they are part of the same larger wave structure. On its own, this fact would confirm that the 5 wave move from $4.02 to $20.68 was a complete wave of larger degree.
There is further corroborating evidence. Waves 1 and 5 are similar at +106% and +115%, a usual EW feature. Wave 3 should be the longest wave, and it is at +171%. In addition, if one multiplies the gain in wave 1 of +106% by 1.618 it produces 171.5%, exactly the gain in wave 3. These relationships are evidence that the rise from $4.02 to $20.68 is a completed impulse wave and that we can call it Major ONE.
Having completed this 5 wave up move, the next correction in Major TWO would be expected to be one degree larger than the two corrections of 33.7% and 35.9% in Major ONE. As shown on the chart, Major TWO declined from $20.68 to $8.77, a loss of -57.6%. The two corrections of 33.7% and 35.9% are close to the Fibonacci 34. The next higher number in the sequence is 55, close to the actual decline of 57.6% in major TWO. Incidentally, if we take the 35.9% decline and multiply it by 1.618, it gives a figure of 58%, very close to the actual decline of 57.6%.
These relationships suggest that silver has completed the same shaped bull market as gold has and that it is at the same stage in its development. Thus silver has probably also completed the first intermediate up wave of Major THREE, in this case from $8.77 to $49.52, a gain of +$40.75 or +464% and has also completed intermediate wave 2 of Major THREE, being the decline from $49.52 to $26.39 or -47%.
How does this decline of -47% measure up in terms of EW relationships? As with gold, where the corrections in Major THREE were shown to be larger than the corrections in Major ONE, the same applies to silver. The corrections in Major ONE shown in the chart above were close to -34%. If we multiply 34% by another Fibonacci relationship of 1.382 we get 47%!
This is mind-blowing stuff for an analyst who did not believe that EW applied to silver!
We can now attempt to make some price forecasts. Silver, as with gold, is starting intermediate wave 3 of Major THREE, which should be the longest and strongest wave in the bull market. It should certainly be longer than intermediate wave 1 which was the gain from $8.77 to $49.52, or +464%, as shown above.
Thus the gain in wave 3 of Major THREE should be larger than +464%. It should be a gain of at least 500%. Starting from the $26.39 low, a gain of 500% would produce a target price of $158.34 for silver. That is the number which equates with the $4500 price forecast for gold and produces a silver to gold ratio of 28.4 ($4500 divided by 158.34).
The gain in gold was forecast to be 200% for this move while the forecast rise in the silver price is 500%. Silver is again predicted to perform better than gold based on these EW calculations.
A word of caution is appropriate at this stage. All EW studies are based on probabilities. While the wave counts may provide a high degree of confidence in the forecasts, one cannot be 100% certain of any forecast. It is necessary to have a point at which it is obvious that the forecasts are wrong. In the case of this silver study, the line in the sand is at $26.00. If the silver price drops below $26.00 the odds are that the above calculations will not work out.
A further word of caution: silver is not for the faint hearted. Silver is considerably more volatile than gold and the corrections are much larger. Silver corrections can and do happen quickly. They are emotionally gut-wrenching and it is easy to get shaken out of one's position near the bottom of a large correction.
Alf Field
1 February 2012
http://www.gold-eagle.com/editorials...eld013112.html
Re: Silver Phase Transistion
Fractal Analysis: 2012 Silver to $70++
Goldrunner
| March 29, 2012 - 8:58am
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Around this point in the fractal cycle in the late 70’s, Gold busted out of its channel to rise sharply higher, along with Silver. Silver’s channel top will lie up around $68 to $70 over the coming months which we believe will be reached in 2012. The next higher angled resistance bands for Silver run from $112 to $115, and then up at the $123 area. By the end of the Silver Bull, we expect to see Silver reach $500+.
Dollar Devaluation Drives The Fractal Relationships
The fractal relationships to the late 70’s are driven by the aggressive Dollar Devaluation in both periods, with the current period one Elliott Wave Degree higher.Both periods present as pure 5th wave parabolas in Dollar Devaluation, and thus, in the Gold and Silver Charts.We are seeing a price expansion in the current Vth wave versus the 5th wave of III in the late 70’s for Gold and for Silver.
We have noted for years that the Fed “owns” the psychology of the markets.The Fed is in the process of converting the Deflationary K-Winter into a period of Stagflation.“Stag” refers to the very sluggish economy, and “flation” refers to rising inflation created by the aggressive Dollar Devaluation.
The Fed and its banks blew out the loan multiplier system for providing new Dollars directly into the economy in 2007 and 2008.The 2nd round of Dollar Inflation is via the Fed printing new Dollars to buy US Government debt- pure debt monetization and default on debt.Thus, they are devaluing the huge load of debt by devaluing the US Dollar.
The Fed “shows inflation when it wants” and it “shows deflation when it wants.”It does so by suggesting that it will, or will not be printing Dollars, the liquidity that drives the markets.All of this jawboning is a joke since the Fed has no choice but to print Dollars at an accelerating rate yet, the markets and investors run a constant bi-polar gauntlet by taking the Fed at their “word.”
The big trading banks dominate the markets.They do the “bidding of the Fed at key junctures.”This is a process of rotating liquidity into the different asset classes that must be supported in the process of changing the cycle during the 2nd leg of debt monetization.
It is the devaluation of the US Dollar that ultimately creates the price rise in Gold, in Silver, and in the PM Stocks.The only true read on the Dollar Devaluation is through the rise of $Gold so the true devaluation of the Dollar can be hidden from the market at key times.In reality, it is the market that creates the devaluation of the Dollar against Gold creating the Gold Parabola so the psychological whims of the Fed can muddle the psychology of the markets.The Gold parabola rises in fits and momentum runs as the market devaluation of the US Dollar ebbs and flows around the psychological effects of what the Fed says; accompanied by the help the Fed receives from entities trading with the Fed’s words.
The spastic Gold market is also affected by a focus on the Dollar Index that has little to do with Dollar Value once Global Competitive Currency Devaluations start in earnest.
We Can Expect QE to Infinity
As Jim Sinclair says, this is complicated stuff.Per Mr. Sinclair we already have approximately $1.3 trillion that were printed and sent to Europe.The markets have not factored this into the price of Gold, yet.Once it does, we should see Gold rise sharply.Remember that it only took $600 Billion of new QE printing to drive Gold up to $1920 in 2011 as per my forecast back in January and April, 2011 in my article entitled Goldrunner: Gold on track to Reach $1860 to $1,920 by Mid-year(gold reached $1,917.20 in late August, 2011 and $1,923.70 in early September, 2011).
All of the US Debts must be on the US balance sheet before Gold goes completely parabolic, for full devaluation of the Dollar and the debts.This is the essence of the question that a Congressman asked Tim Geithner.Tim delayed until the Congressman tossed out the $20 Trillion and then $50 Trillion numbers.Mr. Geithner responded that the number would make the Congressman “uncomfortable.”GEITHNER IMPEACHED BERNANKE’S COMMENT ON “MAYBE NO MORE QE” WHEN HE BASICALLY ADMITTED WE NEED QE IN SPADES GOING FORWARD.Mr. Geithner confirmed that the number of Dollars that must be printed to cover off-balance sheet items is huge.This covers items like unfunded Social Security, unfunded Federal Pensions, future unemployment claims, and the losses of Fannie and Freddie through the end of 2012.
Unfortunately, investors generally keep looking at the trees on a short-term basis, rather than seeing the forest of Dollar Devaluation.As Jim Sinclair constantly notes, we will see QE to infinity.This means that Gold will go vastly higher than most expect in order to devalue the debt and to balance the US budget.
The current markets are completely managed by the Fed and its henchmen.The complete management is a complicated issue as Jim Sinclair has noted. For instance: the Fed and its helpers recently inhibited Gold and Silver at a time when the Greek debt issues were being worked out.It was the Fed’s helpers who had sold the OTC Derivative “insurance” on all of the failed Greek debt.It appears that they hammered inflation expectations to help the deal from go smoothly; and there were cycle timing issues that were already stretched a bit.In reality, most of the Greek Debt holders were forced to take on a different debt series before “default” was declared for a final few.This gives us “insight” that the time in the cycle is short, due to the necessary quick fix deal.
Mr. Sinclair has discussing how the US Dollar’s days as the World Reserve Currency are numbered.This begs the question of what effect this will have in terms of the Dollar’s “value.”Personally, I think that new Dollar Supply is most important, but freeing up huge numbers of Dollars with its loss of reserve status could be a reason for a sharp rise in US inflation if all of those Dollars head home - and a large number of those Dollars coming home to roost might find themselves “chasing Gold and Silver” which could add to the process of the markets re-valuing Gold and Silver much higher.
We are seeing a “price expansion” in the charts of Gold and Silver in the current period with little evidence of a “cycle time expansion” to go with it, other than the general increase in fractal time warranted at one higher Elliott Wave Degree.
In the late 70’s the top in the Gold Chart came as a momentum high into early 1980 with a lower final high coming later.It is possible that we will not see the momentum high before the final high this time, yet it is probable since the continuing deterioration in the economy demands a fairly quick devaluation of the debt before the economy completely rolls over.
The first chart of Silver is the current log chart where Silver is trading inside the black trend channel.We can see the exaggerated decline into the deflation scare bottom in late 2012.Silver appears to be correcting in a flag formation at this time.The measured target of a flag break-out to the upside would target the $65 to $70 area at the top of the black channel.We have break-outs on the RSI and the MACD with the RSI trying to hold the Bullish 50 mark.The Fed has already printed $1.3 Trillion to go to Europe, with more QE necessary to buy US Debt.As the markets factor the Dollar Devaluation in, we’d expect to see Silver explode upward on a fundamental basis.It only took $600 Billion in 2011 to drive Silver from around $20 up to around $50.Additional QE to buy US debt would suggest about 3 times the 2011 Dollar Devaluation from Dec. of 2011 to the end of 2012.The timing appears to be supported with this being a Presidential election year.
If you would like to have access to my detailed proprietary fractal analyses of what is likely to unfold for Silver, Gold, Copper, the HUI and a large number of specific mining company stocks in the months and years to come, the link to our subscription service at the bottom of the article (only $30/mo.). If you do not want specific information but would just like to keep abreast of my general views on the markets, you can send an email requesting to receive my coming free newsletter Goldrunner’s Fractal Corner. See the bottom of the article for further subscription and newsletter contact information.
The Current Silver Bull Chart
The Late 70’s Fractal Silver Chart
The next chart of Silver is an arithmetic 70’s chart.There was no “deflationary bent” in the late 70’s that caused the steeper retracements we have seen in the current period to create increased volatility in the ever expanding environment of Dollar Devaluation, yet it is obvious that we have not seen the first wave of sharp price expansion in Silver that occurred in the late 70’s.Fractal Cycle timing suggests that it should be directly in front of us, and it appears that the next round of aggressive Dollar Inflation is already underway to fuel that type of move as soon as the market factors the aggressive round of Dollar Devaluation into Gold and Silver.
The Silver Parabola is not a smooth flowing form like the Gold Parabola is (as can be seen in a previous article here).We can see that the huge price rise in Silver came almost completely toward the tail end of the 70’s Bull.
We are still in a short-term period of potential cycle weakness until options expire for Silver and Gold futures into the end of this week – but the Fractal Cycle suggests that things will heat up soon to see Silver on its way to $70+ in the next up-leg. We have previously laid out our fractal expectations for Gold in 2012 via our article,Goldrunner: Fractal Gold Analysis Says Gold On Way to $3,500 Mid-year.
For the moment,
Goldrunner, THURSDAY, 03-29-12
http://www.silverseek.com/article/fr...2012-silver-70
Re: Silver Phase Transistion
Manipulated Markets Can’t See the Future
-- Posted Wednesday, 16 May 2012 | Share this article | Source: GoldSeek.com
By David Nichols
Right now we are all in the unfortunate position of being hostage to the dubious forecasting abilities of the Fed and other Central Bankers, as if they are not proactive in putting in place another round of easing, just about every financial market will plunge.
Even though it seems like they've done so much already -- and there is political pressure on them to let up -- once they started down this path then there was no choice but to keep increasing the flow of new currency. This is a big monetary experiment spiraling out of control.
There is little doubt that gold will be much higher into the cycle peak scheduled for mid-2013, but there is cause for concern about a hyper-deflationary episode prior to that run up, similar to the Lehman debacle in late 2008. Of course markets will rally right back when the Fed reacts with a huge liquidity push, but once the chaos starts, the damage will be unpredictable.
http://67.19.64.18/news/2012/5-16dn/image001.png
Theoretically the gold market should be able to “look beyond” these sorts of liquidity concerns, with the precognitive forward-looking ability that markets usually possess, because there is little doubt about how central banks will respond -- with a fire hose of freshly-minted dollars, euros, yen, renminbi, and soon enough, even new drachmas.
But it does seem like this Fed-based market environment has brought on a major contraction in the ability of markets to discount the future. Markets are seeing forward only a few weeks into the future, instead of months, or even years ahead, as they have in the past.
My theory is essentially every financial market is currently not experiencing proper price discovery, due to massive manipulation by central banks. This is especially true for bond markets and currencies, and by extension, gold. After all, what is quantitative easing other than the Fed intervening in the bond market to buy bonds? And they are an unnatural buyer. They don’t buy to capture profits or hedge existing positions, as market participants are supposed to, and they aren’t using currency backed by labor and savings – they are, quite literally, using “monopoly money” of their own creation.
Their interventions in bond markets are influencing the price discovery mechanism that functions so well in freely-traded markets, and is therefore contracting the market's ability to properly discount the future.
Because of this we should expect more volatility in the months ahead, as this “short-term syndrome” becomes even more heightened with further Fed interventions into the markets.
It would not be out-of-character in this environment to see a big drop in most markets -- with everybody screaming about deflation -- to be followed by a huge rally, with everybody then screaming about hyper-inflation. Opinions will be changing rapidly, based entirely on what the market is doing, and not based on a coherent view of the future.
This is why the underlying cycle energy, which is especially critical in the gold market, will have such a massive influence into the next 21-month peak.
Over the past month I have undertaken an exhaustive study of this long bull market in gold, to further unravel the structure of its price patterns and timing cycles, with a specific emphasis on studying the timing cycle that has caused a peak in gold every 21 months.
Sometimes when you look in hyper-focus on a subject, the results can be disappointing. But this was decidedly not the case with gold, and I looked at -- quite literally -- every trading day since 1999. This bull market pattern has been highly precise in its timing and structure, and I believe this structure will only become more precise into mid-2013.
I have just put the finishing touches on a lengthy Special Report on the gold cycle into 2013. In this report it became necessary to venture into topics that I have not previously discussed regarding the "how and why" of cycles in both the natural world, and in financial markets.
http://67.19.64.18/news/2012/5-16dn/image002.png
These are my own theories that I have been developing and working on over the last 5 years, and they have wide-ranging implications, beyond just financial markets.
It became necessary to introduce the basics of these ideas on why cycles form in just about every facet of life on earth, to frame some important points about the gold cycle into mid-2013.http://news.goldseek.com/GoldSeek/1337194415.php
Re: Silver Phase Transistion
Silver Update
Hubert Moolman
| Wednesday, August 22nd
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The silver chart has formed a big pennant like that of the gold chart. What this indicates is that the silver price will likely make a massive move soon. Technically, this move can be up or down. Note that this update is from my premium service originally published on 6 August 2012.
Below is a silver chart with the pennant:
http://67.19.64.18/news/2012/8-22hm/image002.jpg
The technical and fundamental evidence that I have collected, and look at, tells me that the price is likely to go upward out of this pennant formation.
On the chart above, you can see that the price has actually broken out (upward) of the pennant. We have to give it some time before we can say that it is a valid breakout. Also, I have drawn a blue line, which could become another area of resistance.
If we were to consider a move down, then a first target of $15 and one lower at $5 would come into play, based on the patterns. A price of $5 (and even $15) does not make any economic sense, given the amounts of fiat money currently available.
However, there is a real threat of deflation, currently, and the effect of this has to be considered when looking at the future silver price. In my opinion, we do have a perfect setup for a massive deflation which will destroy a lot of debt-based value.
Stock market values have been driven for years by this debt-based value, and will, therefore, be very badly devalued. Many believe that such a fall in stock market values will take down the silver price. I do not agree, and have given many reasons why.
Here, I would just like to point out that the current threat of deflation is due to the massive debt levels, and the inability to service those debt commitments. You can just look at the example of Spain or Greece.
Silver is a real store of value and that is its most significant function. The current crisis will cause a massive rush to that which can store value that will not be destroyed by the debt-collapse. Silver is just about the opposite of debt.
Previously, I wrote about how this debt-based monetary system has created what I call a “mirror-effect”, whereby, silver (and gold) is pushed down in value, to a similar extent as to which paper assets such as general stocks are pushed up in value. This mirror-effect clearly shows up on the long-term charts of gold, silver and the Dow.
Below, is a long–term silver chart (real and nominal) from 1850 to present (generated at minefund.com):
http://67.19.64.18/news/2012/8-22hm/image004.jpg
I have drawn a vertical red line, approximately where silver was demonetized (1870s). Notice how the real price of silver collapsed after the red line, from about $30, until it bottomed in 1931 at $4.29. It then traded side-ways (from the big-picture view) for many years, until it spiked from about the early 1970s, making a peak in 1980, where after, it bottomed again in 2001.
Technically, the bottom in 2001 was the completion of what would be a remarkable double bottom reversal, with the first bottom being in 1931. After a double bottom formation, there is often a big rally, and that is exactly what happened next. If this pattern continues to follow the pattern of a valid double bottom, it will reach levels that will exceed the 1980 high by at least one multiple, but probably by many more.
The interesting thing about this possible double bottom is the fact that the two bottoms came 70 years apart. This 70 years period also appears on the long-term Dow chart. Below is a Dow chart (from stockcharts.com) from 1900 to present:
http://67.19.64.18/news/2012/8-22hm/image006.jpg
On the chart, I have indicated a 70 year period from when the Dow peaked in 1929, to the peak in 1999. The reason for using the 1999 peak instead of the 2007 peak, is the fact that the 1999 peak represents the real peak, since the Dow/Gold ratio peaked in 1999 (like it did in 1929).
Notice the dates of the peaks and how they fit in with that of the bottoms of the real silver price, as well as the similar 70 year periods between. In my opinion, the occurrence of the 70 year period on both charts, in the context as explained above, provides additional evidence of the link between silver’s demonetization (or suppression) and the massive debt bubble of this century – as explained in part 1 of this article.
While the Dow is inflated to the peak in 1929, silver is suppressed to its low in 1931. And again, the Dow is inflated to its peak in 1999, while silver is suppressed to its bottom in 2001.
So, the peaks and troughs, as presented in the above charts, are the manifestation (in visual form) of the debt-based monetary system causing paper and related assets to rise, while suppressing silver. Another way of looking at it is that the debt-based monetary system is fuelling speculation in paper assets by using energy diverted from precious metals.
Silver (like gold) stands in direct opposition to the current monetary system (they are inescapably linked). The fall (and falling) of this system is the rise of silver as money; therefore, massive increases in what silver can buy in real terms.
Looking at a bearish pattern to find critical levels
Below, is 6-year chart of silver, highlighting bearish fractals:
http://67.19.64.18/news/2012/8-22hm/image008.jpg
I have highlighted two fractals by indicating 4 similar points on both. Based on this comparison, we could now be at a very critical area. A break-down below the support (about $26), could mean that the current pattern could follow the 2007/2008 pattern, and take price much lower. This is presented not because I believe that price will break lower than the support, but to show why I think we are at a critical level, and why we should be watchfull.
Pattern Previously Covered
Here, is a follow-up on my previous article about the similar flag-type formations on the silver chart.Below is a graphic which compares the current pattern on silver (from about the beginning of 2011 to present) to a 2007 pattern:
http://67.19.64.18/news/2012/8-22hm/image010.jpg
This comparison is still very much valid; only if price goes lower than $26 could it become invalid. In fact, there is a good chance that price has broken out to the upside.
On both charts, I have suggested how the flag patterns might be similar, by marking similar points, from 1 to 6 (and alternatively from a to h). Based on this comparison, it appears that the silver price might now have found that point 6 or h (at the end of June), and is about to increase significantly.
We could be at very volatile area due to the possible breakout, since this is often the case after a breakout – so be aware! I am of the opinion that silver should make its move higher between now and the end of this month, if this comparison is to be confirmed.
Follow-up on Gold/Silver Ratio
In my last gold update, I covered the Gold/Silver ratio, and explained why I think the Gold/Silver ratio will soon fall straight down. Below is an updated Gold/Silver ratio chart:
http://67.19.64.18/news/2012/8-22hm/image012.jpg
On the chart I have indicated a trading channel in which the ratio has been moving for the last five months. It appears now to have finally broken down, out of the channel. This could be a very strong signal that silver and gold prices are about to rise significantly. Again, here we have to watch for a possible retest of that break-down area, before the ratio falls straight down.
Conclusion:
Silver appears to have broken out of the pennant or flag-type formation, and could now finally be setting-up for a massive rise in price. We should, however, be very watchful, due to the fact that we are at a critical area in price and time. There is a big threat of deflation, but, in my opinion, it is this very deflation (brought about by the collapse of the debt bubble) that could be driving silver prices higher.
For more of this kind of analysis on silver and gold, you are welcome to subscribe to my premium service. I have also recently completed a Long-term Silver Fractal Analysis Report.
Hubert
http://hubertmoolman.wordpress.com
hubert@hgmandassociates.co.za
“And it shall come to pass, that whosoever shall call on the name of the Lord shall be saved”
SilverSeek.com
http://www.silverseek.com/article/silver-update-5796
Re: Silver Phase Transistion
Re: Silver Phase Transistion
Re: Silver Phase Transistion
Re: Silver Phase Transistion
I wonder why the demand nearly tripled from 1954-1964. I realize they were using silver in coins, but that was nothing new. I wonder if it was all the post-WWII increase in money supply that finally got velocity, and required generation of a lot of currency. And that last year in 1964 they minted a prodigious amount of Kennedy halves following his death. But that 10-year spike makes it clear why they knew a shift from silver coinage was inevitable.
On a side-note, we have the same pre-velocity situation going on today. They are flooding the system with fiat, but it has no velocity because so much of it is ending up going toward a re-fill of depleted bank reserves, where it just sits. In principle, they could probably avoid off inflation if they were to stop the money printing now. But there's going to be so much political pressure to keep printing to avoid recession/depression that eventually the new money will all start to have velocity. So their choice will be recession/depression or inflation, and inflation is always easier politically.
Sorry, I wandered there...
Re: Silver Phase Transistion
You may find it helpful to study the SILVER E.O. of 1934, the subsequent Silver act of 1946, and the attending reasons why Lyndon Baines started repealing the FUncTION of the 1946 requirement to turn over everything above 500 troy silver ounces, beginning with legislation in 1961.
Make no mistake, the original SILVER confiscation E.O. is STILL on the books and can be re-inacted at any time. Lotsa folks have heard about the gold confiscation. Silver? Not so much.
Quote:
The Silver Purchase Act of 1934, President Roosevelt issued Executive Order 6814, nationalizing the nation’s hoard of privately owned non-monetary silver, and prohibiting private ownership of quantities exceeding 500 troy ounces.
Quite an illuminating article about all of this which totally addresses/answers your question, Sparky, can be found here:
http://www.silvermonthly.com/why-did...united-states/
All has to do with intrinsic silver values, seinorage on coins, and strategic reserves--millions and millions of ounces-- which started to be liquidated via public auction, shortly thereafter. Said strategic silver reserves, including the famous "CC" silver dollar hoard found in the basement of the CC Mint which was to come along, the GAO blew out to the public by means of very public, full page ads in the WSJ and elsewhere.
beefsteak
