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 Replies: 49 / Views: 4,115 |
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Pillar of the Community
United States
1590 Posts |
This is a question for the technical experts.
I have been doing a lot of reading lately and keep seeing a small but pretty convincing group of technical folks that are showing that we are on the cusp of the "C" portion of an "ABC wave".
They are pointing to a double top in silver, and they are showing an aggressive/massive short position among the commercials.
They pointed out that every time this has happened in the last three years has presaged a massive drop in PM prices. They say these are the same conditions that occurred before the 9/11 drop and before the "spring bloodbath". With this difference; the Commercial Short position is the most massive one yet.
The thought is that there has been manipulation via propaganda and "Cheerleading" concerning QE3 in order to get the non-commercial segment to go long. And now that they have pretty much got as many longs as they can in the market now, they are posed to make massive profits by going short.
What is troubling is that some see diminishing returns every time this happens as more and more non-commercials exit the market completely. The concern is that if there is a "third washout" then it will be very very difficult to gain back a significant portion of the non-commercial longs that, in this scenario, would get wiped out; for the third time.
Your thoughts?
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Pillar of the Community
 United States
1590 Posts |
I forgot to add that the results this time could see silver spot prices in the very low to sub $20 range.
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Pillar of the Community
United States
5862 Posts |
Half the experts predict PM prices are about to take off to new heights and the other half predict prices will plummet.
I predict that half of the experts will end up being right, and half will end up being wrong.
Personally, I'd love to see prices fall that low again so I can stock up. My only fear is that prices will first drop to $29 and then, right after I go ahead and make some major purchases, prices will then keep dropping to the sub $20 range...
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Pillar of the Community
United States
1510 Posts |
I figured gold and silver will rise soon before the 2012 "end of the world"
Retired USAF 1983-2003
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Pillar of the Community
United States
2120 Posts |
Quote:
I figured gold and silver will rise soon before the 2012 "end of the world" Not enough people are taking this into account. People are going to be hysterical all December long. I think we're going to see a buying op by then. |
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Pillar of the Community
United States
5862 Posts |
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Pillar of the Community
United States
5833 Posts |
No expert opinion: IMO the same panel of experts say PM will rise and fall, so they can't be blame if it goes either way. LOL!  |
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Pillar of the Community
United States
1200 Posts |
Barry hit the nail on the head. Half the pundits say "Up" and the other half say "Down." Half of them will end up being right (in some way, to some degree for some period of time) and the other half will end up being wrong (in some way, to some degree for some period of time).
What I'd like to know is whether the present-day Mayans (if there are any) are buying or selling PMs during the last quarter of this year.
Edited by Fat Freddy
10/16/2012 5:20 pm
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Pillar of the Community
Mexico
1304 Posts |
All the Mayans that I know (and I know a few since there is a huge Mayan population in Mexico) are confident that the world, as we know it, IS ending. However, they are not stocking up on PMs or selling (they really don't have any to sell) since they know it'd be of little use. After all, it IS the end of the world. Right?
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Pillar of the Community
United States
4008 Posts |
Not being a "technician", this is a difficult question to approach. I've always used a fundamentals approach to investing. Poring over charts seems like a good way of observing the past but perhaps not too good at predicting the future... a bit like driving while looking in the rear-view mirror, if you will.
One of the things that charting will not be very helpful with is when new things occur that never happened before. My examination of the stock market tells me that there is a lot of this going on these days and that the things that happened, for example, prior to high frequency trading, sub 1% interest rates, or the QEs may not be too helpful in the current environment.
Mining is a business that consumes a LOT of diesel fuel for the big diggers, haulers, crushers, and other ore processing equipment. Careful consideration of the amount of fuel needed to generate an oz. of gold or silver would be needed before deciding how low the prices of these metals can go before the mining companies just shutter their mines and wait until prices rise enough for them to again become profitable.
The current pricing of gold and silver seem pretty strong to me. In spite of various paper silver dumps, the price of silver has not dropped by very much and has rebounded off of the recent drop lows. We may very well see a price pattern that is typical for this time of the year, complicated as prices may be by the election, world events, and oil prices.
What I can't figure out is why there are any commercial longs. Seems as if the shorts vs. longs game is rigged and that the shorts always seem to come out on top. So... why do any of those guys ever go long on silver? Are they making any money this way? I suppose that they could make money if they came in, say during the recent $27-28 price and then sold out during the $34-35 price... if they were nimble that could work... but it could also back-fire on them as has happened before when the options costs were raised 4-5 times in just a week or two.
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Bedrock of the Community
13014 Posts |
Personally Id be interested to know how many of the "experts" predicting it to take off have a financial interest in it doing so Quote:
What I can't figure out is why there are any commercial longs. Theres a ton of potential reasons, not sure if any are true or not but could help with taxes, be an insurance plan, dividend, claim to a future lot if they needed. Only those companies really know but its possible the reasons could have little to do with the actual price or current price |
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Pillar of the Community
United States
1590 Posts |
basbal21, on that we agree. Meaning I think the vast majority of the "experts" predicting it to take off have a financial interest in doing so.
That is why I asked for the opinion of a "Technician". They seem to be saying we are heading for a plunge. Too bad we don't have any here to give us their take. I'm not sure I go with all that is said of the techicals, but I do have to admit they have an interesting track record. That is those who only read the charts. And don't make the charts fit their "wanted" outcomes.
Joe
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Bedrock of the Community
13014 Posts |
I think so too. I'm sure theyre some sincere experts out there who really do think it could take off, but I think the majority have an interest in it doing so. Free investment or stock advice is often just paid advertisements for things. If they really did have such inside info theyd be managing a hedge fund or giving the info to their buddies from their hedge fund managing days and by the time they released it to the general public itd be on the tail end of the growth. To be fair the experts predicting 50 dollar silver in 2011 were technically right, they just left out the part that it would only be there for a very short time. I look at it like the dealer telling you silver will be at 80 soon or a coin will triple in value. If they really believed that they wouldnt be selling them. They would wait for it to happen. If the experts believed silver was going to take off theyd be heavily invested in them. The track record of a lot of those free experts arent very strong either, half of them you would have lost money following all their next big thing ideas. Personally I agree that were probably looking at a plunge soon. The graph looks extremely similar to the spike in the 80s so far. I think the other thing to remember too is a lot of this is assuming bullion demand will keep increasing. A large percentage of people will get to a point where they say I have enough I'm done. Despite the best efforts of the members here to pick up their slack when they leave the market  , there will come a point when the market wont support such high sales anymore. Edited by basebal21
10/18/2012 1:48 pm
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Pillar of the Community
United States
1590 Posts |
Basebal21, I agree completely. I think I mentioned that my bullion sales are way down from the same time last year. In fact according to my spreadsheet; my sales are at 14% of where they were this time last year.
I guess that is why I keep looking askance at the silver "cheerleaders". I have personally seen a clear divergence between the demand for paper silver and real silver. I'm just waiting for the paper market to realize it!
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Pillar of the Community
United States
5862 Posts |
Quote:
The graph looks extremely similar to the spike in the 80s so far. I also used to think we were just undergoing another spike like the one in the early 80s, but now I'm not so sure. Unlike the 80s, when you had a really sudden rise (tenfold increase in a matter of months) followed very closely by an almost complete reversal, this time we had a much more gradual rise and the reversal hasn't gone anywhere near back to where it was.    I still think there is a chance that prices will eventually go back down to historic levels, but I'm no longer as convinced about it. I'm now thinking it just as (if not more) likely that prices will stay where they are (more or less) for the foreseeable future. Edited by barryg
10/18/2012 2:36 pm
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Bedrock of the Community
13014 Posts |
They had different rate increases but its still very similar, ours just happened backwards. They had the small run up second we had it first. We had the run up then the sharp drop then the spike, where they have the spike the drop then the run up.
It may not go back down to 5 but 10 as a baseline with the industrial demand is very possible
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Replies: 49 / Views: 4,115 |
Posted 10/16/2012 2:05 pm
