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Ardent Listener
Administrator
USA
4841 Posts |
 Posted - 04/08/2010 : 17:18:49
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A (Bearish) Technicality of Silver
By J. Derek Blain
Jan 13 2010 10:45AM
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Don't get me wrong: I love silver - I have for as long as I can remember. There is just something about the oft-mystically-mentioned white metal that attracts me. Maybe I hate vampires (that new Twilight craze certainly hasn't added any vampire merit points), or maybe I just like high electrical conductivity and a pure looking luster.
There isn't really one single thing about silver that I like the most - but there is one thing about it that I don't like very much of late.
Silver is far too expensive.
Now, before you fly into a flurry of arguments about how "silver is real money" and debt denominated instruments are "worthless pieces of paper" (which is actually untrue because they are not only worthless, they are of negative worth, because they are debt), and how it is one of - if not the - most widely used metals in the world and demand for its application can only go up as the developing world's middle classes emerge and demand more electronics and such....
Before you say any of that, you have to understand what "expensive" is.
Expensive is a relative term. A Mercedes SL500 is expensive relative to a basic Honda Civic. Gold is expensive to silver. A new computer relative to a ceramic mug.
Or relative strictly in dollar terms. Sometimes something is simply expensive all on its own. Now again this is in perspective - when I say it is expensive I could be saying "it takes too much of my labor or free resources to acquire an ounce of silver." That is certainly part of it.
But the other part is that it is expensive when you measure it in terms of market psychology. In terms of market psychology silver is very overpriced - not too say that people aren't buying, because they are (reading the latest C.O.T. report should give you an idea. You can view it HERE. - specifically, grab the number of weekly open contracts, chart them and do an overlay with the price of continuous contract. Surprise surprise!)
One little study I did on silver recently was using RSI divergence from price. I have used this before (our short recommendation on AIG using RSI and Money Flow), to some success. This is of course not my primary piece of data used to determine silver is starting a multi-month downtrend that should make a lower low than October 2008, but its another piece of the puzzle that I have kept track of and is fairly compelling.
Here's an example of what I mean:
Silver has experienced a fairly large period of both RSI and MACD diverging from the price movements - as prices went higher and higher, both of these strength indicators steadily declined. Now that the uptrend has been broken with conviction, we should see a much faster and further fall in silver prices than we did in '08.
Lucky for me, I have thought silver was too expensive for some time now (seeing as we are in a period of deflation, no matter how people clamor at the utterly temporary uselessness of the Fed's money-printing and say it is immediately grounds for silver to go to $50.00 / oz and gold to $3,000.00).
As such, the strategy is to accumulate a hefty batch of "worthless" FRN's which I plan to exchange for said real money once silver has found a bottom. One of the indicators I will be looking at to indicate a good buying opportunity for the precious metal is a solid price/divergence in RSI and MACD.
I'll keep you posted.
Best of luck and be safe in the cold weather.
J. Derek Blain
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Think positive. |
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Country
1000+ Penny Miser Member
USA
3121 Posts |
 Posted - 04/08/2010 : 17:38:17
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While the SILVER technicals in January (the month this article was written) looked negative, the trend for higher SILVER is firmly in place here in April. The next PM surge, which could come at any time now, should take SILVER back to $20.  .
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The things that will destroy America are prosperity-at-any-price, peace-at-any-price, safety-first instead of duty-first, the love of soft living, and the get-rich-quick theory of life.
– Theodore Roosevelt
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Edited by - Country on 04/08/2010 17:39:41 |
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NDFARMER
1000+ Penny Miser Member
USA
1197 Posts |
Posted - 04/08/2010 : 18:09:04
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| $8.00 - $10.00 Silver wouldn't surprise me a bit. I have bought quite a bit in the last couple of months so it is sure to go down. |
COPPER - the "poormans" precious metal!!!
SELLING - $100.00 face copper shipped to you for $189.00 machine rolled or bagged - PM me if your interested. |
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thogey
1000+ Penny Miser Member
USA
1617 Posts |
Posted - 04/08/2010 : 18:57:27
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| I would love $8 silver. I beleive I would mortagage the house. |
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Copper Catcher
Administrator
USA
2092 Posts |
Posted - 04/08/2010 : 19:10:07
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I wonder what that guy would say about this:
To the US Department of Justice! (The World's Biggest Fraud!)
Silver Stock Report by Jason Hommel, April 8th, 2010
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cptindy
Penny Hoarding Member
572 Posts |
Posted - 04/08/2010 : 19:51:18
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I like the idea of silver going up.
But, I love the idea of silver going to $8!
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"It is the nature of the human species to reject what is true but unpleasant and to embrace what is obviously false but comforting"
" The average man doesn't want to be free. He wants to be safe."
H.L. Mencken
http://silver-news-today.com/ |
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beauanderos
1000+ Penny Miser Member
USA
2408 Posts |
Posted - 04/08/2010 : 19:57:06
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I've grown wary now every time silver makes any kind of significant price advance. My bullion is of course a long-term hold... but it does get disheartening to see (so many times) silver advance and then get taken down by TPTB. One good thing about those repeated occurrences is that there are a whole bunch of buyers waiting on the sidelines for the chance to buy more at cheaper prices. So like a Dad pushing his daughter on a swing, the pendulum will move a little furthur in the opposite direction when the prices bottom, and all the "wait/watchers" pile in, taking a bit more physical off the market each time. As time passes, 90% (for instance) is getting harder to procure (lot sizes on ebay shrinking), and the day will come (soon I hope) when there is a short-squeeze price explosion to the upside that Snidely Whiplash and his banker cronies can't cap. I've reached the conclusion that no one can predict the markets, and no matter how well written and compelling a piece may be, it's predictive powers are nil. JPMorgan can read technicals just as well or better than we can, and they know just the right time to crush burgeoning bullish precious metals sentiment.  |
Hoard now and hold on!
http://coppermillions.blogspot.com/
http://wherewillyoubein2012.blogspot.com/ |
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cptindy
Penny Hoarding Member
572 Posts |
Posted - 04/08/2010 : 20:10:08
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| +1 beauanderos |
"It is the nature of the human species to reject what is true but unpleasant and to embrace what is obviously false but comforting"
" The average man doesn't want to be free. He wants to be safe."
H.L. Mencken
http://silver-news-today.com/ |
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AGgressive Metal
Administrator
USA
1937 Posts |
Posted - 04/08/2010 : 20:14:23
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| Barring a major destruction of debt and a severe bout of short-term deflation I cannot imagine this happening. Especially with the news about the COMEX that has come out. Saying silver will go back to $8 is like saying gold will go back to $600 - its not impossible but its hard to picture. |
And he that hath lyberte ought to kepe hit wel / For nothyng is better than lyberte / For lyberte shold not be wel sold for alle the gold and syluer of all the world.
-Caxton's edition of Aesop's Fables, 1484 |
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fasTTcar
Penny Hoarding Member
Canada
573 Posts |
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wolvesdad
1000+ Penny Miser Member
USA
2164 Posts |
Posted - 04/09/2010 : 00:01:28
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I could see gold at $600 much more easily than silver at $8.
Silver at $8??? Yeah, I guess a coordinated orchestrated, determined and persistent push by TPTB and the big banks could do it.
But....as has been said, I think all the physical silver would get bought up in a heartbeat! Like even the 1000 ounce bars and all! |
"May your percentages ever increase!" |
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JWRAY
Penny Collector Member
USA
378 Posts |
Posted - 04/09/2010 : 00:04:59
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| I just wish I had bought more back when it was that cheap. If it hit $8 any time soon, I would be gobbling up 100 ounce bars like tic-tacs. |
MOVING SALE!!! Selling Copper Cents 1.4 shipped - in limited quantities PM me and we'll talk. |
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beauanderos
1000+ Penny Miser Member
USA
2408 Posts |
Posted - 04/09/2010 : 08:22:16
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| Your comment is exactly what is funny about human nature. If silver did get to $8, there's a boatload of people talking now that would back off and start saying "well, it could hit $7, I'll buy then," or "look how far it's dropped, I better wait for $6." |
Hoard now and hold on!
http://coppermillions.blogspot.com/
http://wherewillyoubein2012.blogspot.com/ |
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Country
1000+ Penny Miser Member
USA
3121 Posts |
Posted - 04/09/2010 : 08:26:31
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I say: $20.00 SILVER Coming.
$1200 GOLD Coming real soon.
$4.00 COPPER Coming real soon - start running your Ryedales 24/7 again.
BUY NOW, before the train leaves the station....
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---> Come to the new and improved realcent: http://realcent.org
The things that will destroy America are prosperity-at-any-price, peace-at-any-price, safety-first instead of duty-first, the love of soft living, and the get-rich-quick theory of life.
– Theodore Roosevelt
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Edited by - Country on 04/09/2010 08:49:07 |
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beauanderos
1000+ Penny Miser Member
USA
2408 Posts |
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NDFARMER
1000+ Penny Miser Member
USA
1197 Posts |
Posted - 04/09/2010 : 11:57:53
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quote:
Originally posted by beauanderos
Your comment is exactly what is funny about human nature. If silver did get to $8, there's a boatload of people talking now that would back off and start saying "well, it could hit $7, I'll buy then," or "look how far it's dropped, I better wait for $6."
I agree with you, there are a lot more buyers now then there would be a $8.00 everybody want to buy on the way up but nobody wants to buy on the way down. I don't know about the $8.00 area but I think we could see $13.00 silver again.
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COPPER - the "poormans" precious metal!!!
SELLING - $100.00 face copper shipped to you for $189.00 machine rolled or bagged - PM me if your interested. |
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nologiks
Penny Sorter Member
83 Posts |
Posted - 04/09/2010 : 20:45:37
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| I have told my self, if silver ever gets under 10 again.. I am will get a loan credit cards and every dollar borrowed and not borrowed to load up.. Then when it goes up again.. sell and cover debts and keep profits.. |
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Country
1000+ Penny Miser Member
USA
3121 Posts |
Posted - 04/09/2010 : 21:10:46
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quote:
Originally posted by nologiks
I have told my self, if silver ever gets under 10 again.. I am will get a loan credit cards and every dollar borrowed and not borrowed to load up.. Then when it goes up again.. sell and cover debts and keep profits..
Investing with someone else's money is usually not a good idea. It's sort of like borrowing on margin in the stock market. You don't want that margin call. If you need more money to invest in PMs, my suggestion is to find ways to earn more fiat. |
---> Come to the new and improved realcent: http://realcent.org
The things that will destroy America are prosperity-at-any-price, peace-at-any-price, safety-first instead of duty-first, the love of soft living, and the get-rich-quick theory of life.
– Theodore Roosevelt
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$8.00 Silver Coming?
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