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    Senior Member AirborneSapper7's Avatar
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    Gold And Silver Bull Market Breakouts

    Gold And Silver Bull Market Breakouts

    Commodities / Gold and Silver 2010
    Sep 27, 2010 - 04:55 AM

    By: Howard_Katz

    Above are the weekly basis charts for gold and silver for the past 3 years. Two weeks ago silver broke out of a symmetrical triangle and started to move aggressively to the upside.





    Typically, during the first major term bull market in the precious metals silver will lag behind gold. At that time, the traders are conservative; hence silver, which is the more volatile metal, lags. But there comes a point where silver is so under valued that it starts to play catch up. In the first major term bull market of the 1970s (1970-74), silver played catch up from 1972-1973. Then both of the precious metals declined from year-end 1974 to mid-1976. In the second major term bull market in the precious metals, silver lagged behind gold from mid-1976 to mid-1978. Then silver exploded in mid-1978 until early 1980 in what is known as the Hunt silver bubble (where Bunker Hunt lost most of his fortune by trying to manipulate the silver market).

    The question we must ask ourselves is, is history repeating? Did the conservative phase of the precious metals bull move end on Sept. 3 and is the speculative phase just beginning. One of the reasons that it is important to answer this question is that the exploration stocks also come to life about the time that silver begins to move. The strategy here is to be in the conservative sector of the precious metals (gold versus silver and blue chip mines versus exploration mines) during the early phase and to be in the more speculative sector during the later phase.

    As we have seen, both gold and silver hit important highs in March 2008. However, since that time gold has gone up almost 30%, and silver is flat. So we have just been through a substantial period when silver lagged. Similarly, the exploration stocks (as measured by the CDNX) lagged badly in 2008. Will they now start to play catch up?



    The 25 year chart of silver shows a long, slow base which lasted through more than the decade of the 1990s. The breakout came in 2004 in the form of a double bottom, and the 2008 decline took us back down to the breakout point of the double bottom. Here silver met support, and since that time has traced out two triangles, the first parallel to the 2006-07 triangle in gold, the second looking almost exactly like the 2008-09 ascending triangle in gold.

    The key to success in the markets is to wait for a fundamental mis-evaluation (where the market price is far distant from true value). Such mis-evaluations usually lead to long term moves, either up or down. Because these moves are so long there is plenty of opportunity to take a position. Once the position is taken, you just ride things out. Remember that the vast majority of the people are up too close to events. They cannot see the forest for the trees. They make their decisions on the conditions of the moment.

    For example, consider the 2008 decline in gold. I was bullish from early in the decade. When gold turned down in July 2008, I missed the decline and had to sit while the market went against me. But since the major trend in gold was still bullish, my decision to sit tight worked out nicely. I held through the Sept. Oct. decline and remained long through the October bottom and the ensuing rally back to $1,000 in Feb. 2009.

    This was in contrast with those members of the establishment who had “put 10% of their portfolio into gold in case of a rainy day.â€
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    Senior Member AirborneSapper7's Avatar
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    Related:

    Gold Bull Strong as U.S. Fed Stuck at Permanent 0% Interest Rate
    Commodities / Gold and Silver 2010
    Sep 23, 2010 - 05:19 AM

    By: Jim_Willie_CB

    http://www.marketoracle.co.uk/Article22929.html
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    Senior Member AirborneSapper7's Avatar
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    Gold Price Blasts through $1300.00/oz Barrier

    Commodities / Gold and Silver 2010
    Sep 29, 2010 - 04:02 AM

    By: Bob_Kirtley

    Gold prices were drifting lower during the trading session on the London Stock Exchange with a breather being the order of the day. Things changed dramatically when the New York Stock Exchange opened as gold prices reversed their loses, moving into positive territory and taking out the $1300.00/oz barrier to close at $1308.60/oz. Inflation adjustment aside, this is another new all time high, which gives us great pleasure to write about.



    Taking a quick look at the above chart we can see that gold prices have made a new high today putting even more heat on the shorters, some of whom may cover their positions this week while others will hang on a little longer before capitulating. Also on the chart we can see that the moving averages are moving upwards in support of gold prices which bodes well for future increases as we do not want to see gold opening a large gap between its price and the 200dma thus tempting a sharp correction. The technical indicators, the STO, RSI and the MACD suggest that gold is overbought, so we should be prepared for gold to take a rest at this point. However, the world of pretend money is in turmoil with one country after another devaluing their own currency rather face the truth about their own economic mess, for which they are largely responsible.



    Below is the daily chart of golds progress which can found 24/7 on Kitco.com tracking golds movements around the clock as each stock exchange opens and shuts. Like it or not though, its the United States that provides the action, the other stock exchanges are followers at this stage

    Also in bounce back mood was silver, where silver prices were heading south and looking friendless for a while showing loses of around $0.40 before the silver bull awoke and charged forward reversing the loses and finishing the day on a positive note at around $21.74. As we write Hong Kong has just opened and silver is on the move again adding another $0.14 in early trading. Those shorting silver must be wondering just what went wrong as their day in the sun saw the clouds form, bringing with them a hurricane style whoosh, boosting silver prices in an unstoppable manner. Where to now you ask? Well we expect this squeeze to continue and push silver prices up to the $30.00/oz level before you can say silver bear!

    http://www.marketoracle.co.uk/Article23075.html
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    Senior Member AirborneSapper7's Avatar
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    The Cost of Fed Incompetence

    Politics / Central Banks
    Sep 29, 2010 - 02:33 AM

    By: Richard_Daughty

    I have grown old yelling at my neighbors and family members to buy gold, silver and oil, to little-to-no avail, and I can see that they are getting bored with my same old million reasons why they should, and how their deliberate inaction only proves their stupidity, which I never tire of pointing out, so they can't say that they "didn't know" that they were stupid.

    So, recently, I was standing in the street outside of Griswald's house, telling Old Man Griswald how he was an idiot for not buying gold, silver and oil as the only rational defense against the inflationary horror unleashed when his own stupid government (that he and his loathsome Leftist friends elected over and over again) was deficit-spending so unbelievably much money, dutifully created by the foul Federal Reserve, which is a complete failure as an institution if ever there was one, having destroyed 98% of the buying power of the US dollar since the Fed's inception in 1913 by creating too much money and credit, when their original purpose was to "keep prices stable," to which I cynically laugh in Sneering Mogambo Rebuke (SMR) "Hahahaha!"

    You can probably imagine that I was, as usual, getting pretty worked up by my long harangue, and I was just getting to my famous angry summation of, "If you don't buy gold, silver and oil with all your money, then you are making the Biggest Freaking Mistake (BFM) of your life, you moron!" when, suddenly, Griswald himself opened the door!

    He hollered out how the biggest mistake he ever made was to choose to live in a place so near to me, and how I am some kind of weirdo, gun-nut, gold-bug bozo.

    I am, of course, cleverly rebutting his every point by reminding him that he is an idiot for not buying gold, silver and oil because of that, you know, government deficit-spending thing, and how the Fed is creating so much new money, which increases the money supply, which makes prices go up, which makes people upset, which leads to disquieting things like the French Revolution, and the Russian Revolution, and people like him getting destroyed financially.

    I even reminded him that the M2 measure of the money supply is up about $400 billion in the last 12 months, and even though the monetary base was up only about $220 billion, taking it to $1.987 trillion.

    And, of course, I mentioned how the Federal Reserve is back to increasing Total Fed Credit (the fabled magical fairy-dust credit that becomes many, many times bigger when it finally becomes money, adds to the money supply and causes the misery of price inflation), which took this particular stinking load of lies and fraud up another $2.7 billion last week, taking the Fed's total "cost of Fed incompetence" to a staggering $2.289 trillion. So far.

    Well, you can take Griswald off of your list of People Scared And Buying Gold (PSABG), but there are apparently plenty more who are not, particularly Europeans, as we learn from the Northwest Territorial Mint's newsletter that the World Gold Council (WGC) reported recently that "during the last two years there has been an 'extraordinary increase' in the retail demand for physical gold products in Europe," which must be significant because "European demand represented 40% of global demand for gold in 2009." Global!

    Now, I am second-to-none in raw xenophobia, paranoia or conspiracy theorizing, especially as concerns Europeans, which is a phobia somewhere on the Mogambo list of the Top 100 Scary Things (T100ST), probably categorized somewhere below "Werewolves" but above "Total strangers who seem to hold a grudge against me, talk about me behind my back, and plot against me," which, I note for the record, is what foreigners do!

    I can't help but notice that foreigners are always talking in some foreign language which I can't understand, which proves - proves! - that they are talking about me and hatching ways to hurt me, or else they would speak in English so that I could understand them. Can't you see how it all fits together? It's obvious!

    Well, I can tell by the stunned expression on everyone's faces that they do NOT "see how it all fits together." After an embarrassing silence that seemed like an eternity, with everyone looking at me with a mixture of disgust and disbelief on their faces, finally the spell was broken when the Mint went on that in the second quarter of 2010, Europe was still "the source of 35% of the world's demand for small gold bars and coins," whereas just two years ago, European demand for gold had been only a "relatively insignificant" 7% of global demand.

    And since nothing in the macroeconomic environment has changed except to get worse, then the soon-to-be panicked buying of gold and silver by people and institutions worldwide will hand Huge Freaking Profits (HFP) to those who buy these magical metals now at bargain levels, which makes it so easy that you giggle with delight, "Whee! This investing stuff is easy!"

    Richard Daughty (Mogambo Guru) is general partner and COO for Smith Consultant Group, serving the financial and medical communities, and the writer/publisher of the Mogambo Guru economic newsletter, an avocational exercise to better heap disrespect on those who desperately deserve it. The Mogambo Guru is quoted frequently in Barron’s, The Daily Reckoning, and other fine publications.

    http://www.marketoracle.co.uk/Article23067.html
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