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 Replies: 17 / Views: 2,602 |
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New Member
United States
29 Posts |
I haven't been following markets for very long (3 years), but I have a hunch that something major is coming shortly. This is important because gold and silver will be affected.My prediction: There is about to be another large sell off in global markets. This sell off will trigger Forced Liquidation in nearly all asset classes including gold and silver, similar to what took place in 2008. If this scenario plays out, it will be a major bottom in precious metal prices and a GREAT buying opportunity. Below are various technical indicators to back up my thesis. Remember that markets often move in patterns, so historical price action can be an indicator of future price action. In other words, history repeats itself. Also keep in mind that major movements in asset markets usually happen in the latter part of the year. Often in August, September, October or November. There's usually an event that triggers the sell off. Some possibilities: China crashes, Japan or Greece default, A Horrible Employment or GDP number out of the United States. Who knows? - EXHIBIT I - The U.S. Dollar (5 Year Approx.) As we all know, precious metal and stock prices are inverse correlated to the U.S. dollar. When there's a sell off in assets (Stocks, Commodities, PM) the dollar goes up. It's a sign of tightening global liquidity. As you can see from the chart above, the dollar is poised for a break out on the upside, which would likely lead to falling stock markets. EXHIBIT II- The S&P 500 Sideways Price Action (3 Months) Why is this significant? Because periods of sideways price movements are usually followed by major market swings. It could be to the upside, or the down side. EXHIBIT III - Long Term S&P 500 Chart (40 Years) The recent market top looks right on par with the previous tops made right before market crashes. EXHIBIT IV - Copper (5 Year) Copper prices are often used as an indicator of global economic activity. Copper is imperative for construction, as it's used for piping and power lines. The recent sell off is alarming, and it looks eerily similar to the sell off that proceeded the global financial crash of 2008. The "Double Top" formation you see is usually a sign that lower prices are ahead. - ** WARNING: DO NOT GO OUT AND GAMBLE THE KIDS COLLEGE TUITION BASED OFF MY PREDICTION!** I'm a total amateur investor; I could be completely wrong. This whole thing is just a guess on my part, but I wanted to share my findings. Predicting markets is EXTREMELY difficult. Also, if Germany decides to bailout the EU, or Bernanke goes into QE3 mode, my entire theory would be nixed. |
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Pillar of the Community
1028 Posts |
Just wanted to say that this is probably the most well thought out and thorough post I've ever seen. Congrats I agree to an extent that there will be a price drop in the PM market, possibly soon. Your post was just so much information to respond to individual parts....and its the end of the day and I'm tired :) Quote:
Also, if Germany decides to bailout the EU, or Bernanke goes into QE3 mode, my entire theory would be nixed Problem....Germany will bailout the EU I think |
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Valued Member
United States
302 Posts |
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Problem....Germany will bailout the EU I think Germany will bailout the EU. No one else can. But, it won't be until she has squeezed every concession she can get from the rest of the EU, primarily total control of the economic future of Europe. One of the fallacies of the Euro was that a common currency could exist without a central authority to administer it that had the power of taxation. The Euro crisis will not go away until Germany has the power to regulate the Euro and the power to economically control the rest of Europe through central taxation. When will that happen? No idea. But until it does, look for the EU mess to get worse and worse. And as long as the EU mess exists, look for flight TO the dollar artificially propping up the dollar. When the EU mess is solved, look for flight FROM the dollar to the Euro (or whatever may take its place). |
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Pillar of the Community
United States
1450 Posts |
I agree that this is a well thought out post and I have had the same feelings in my gut for the last 2 days. I am not a technical charts guy but I watch general patterns and have come to the same conclusion. I have been sitting pat on my PM stash for about 6 months now because I didn't see any real patterns but I felt a big drop coming in the next few days. Question,is it time to take profits or is it time to hold what you have and try to free up some cash for a major buying opportunity. Also,if buying,do you buy gold or silver? These patterns aren't clear to me yet but I believe we are poised for the final shake out before gold $2000 and silver $50,maybe by the end of the year!
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Pillar of the Community
United States
3670 Posts |
 Gold was up to around 1680, but in the last 24 hours a real nose dive has indeed kicked in, as of a minute ago gold was at 1611, and silver real close to 30 bucks again, and I REALLY FEAR IT IS ABOUT TO LOOSE THAT 1600 AN 30 SUPPORT.... I pointed out weeks ago that I noticed a gain pattern, then drop back to 1600 and 30 and then repeat. And that pattern has been holding true up until this point anyway, we will see if the drop continues.... BIG NEW NEWS, Mommar Gadhafi is dead I hear, and we will see what effects this has on the Pm market as well, if any at all.... Edited by Silverhawk74
10/20/2011 12:30 pm
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Pillar of the Community
United States
667 Posts |
An interesting look and one that I can respect. Support -  I hate that word. IMHO there is no such thing as support. Support was something in the past that held the price of PM's at a constant level for way too many years. I still use my flux theory with out going into the great details of explaining it. Gold and Silver is in a great deal of flux right now. I have not gotten a clear feeling of which way it will swing as there are indicators for both ways. Someday I will out it down in clear words but since it is just a theory I am not sure if it is correct. So where does that leave me with my thoughts on where the price of PM's are going? They could go up or down by between $5 - $10 through out the next two months. I know that is a wide call and a safe one but I really am not sure if it will be a positive or a negative. I look at it this way I am cautious but not conservative. I am not buying a lot but I am buying some at as low of a price that I can get when I think it may be in a dip. So far each buy has been lower than the other but not enough has been bought so that a large fall doesn't do major damage. PM's can be a treacherous road at times. If someone could ever call the market they would be far wealtheir than I would ever hope to be. The only real possible big money losers this year are those that bought with credit. I know there have been a lot even if they don't want to talk about it right now. While I hold most of my PM's I did cut some loose during the highs hoping for a large fall in price. I'm betting on a drop below $20 but if it starts to climb then I am ready to reinvest before it hits my sell price so I still win. |
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Pillar of the Community
United States
3670 Posts |
I can agree with your support theories MK or the lack there of. As like you mentioned in these hard to predict UN-certain times, I would not be surprised to wake up to 1700 gold tom, or 1500 for that matter, even though gold and silver have recovered a bit this afternoon, back to 30 and half or so on silver, and 1620 on gold.....
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Pillar of the Community
United States
830 Posts |
Yeah I've been using this latest rally in stocks to lighten up on long positions and add to short positions and hedges. It feels like something is getting ready to happen to the down side.
I like the charts John, thanks
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Pillar of the Community
United States
4008 Posts |
Good analysis and charts for sure. I've always thought that looking at past data and trying to project that into a different future with any degree of accuracy was a bit like driving by looking in the rear view mirror. Yes, there is a lot of data that we can look at but we need to understand that this data was collected during times that may have been significantly different from the current time. Do these data still have the same meaning now as they did then? Perhaps... and then again, perhaps not.
For myself, I will continue to buy silver regularly and dollar cost average into my position. This is basically playing the averages for buying and also for selling at some point in the future. The recent drop in prices from the low $40s to the low $30s has been a time of accumulation for me. If it drops lower, that will be fine as I am still accumulating and can then acquire additional ounces for the same money.
As an experienced investor, I can say that no one knows where the top or bottom of any market lies. A few have bought at the very bottom or sold at the very top of a market and I have done so myself. None of this was due to their or my investing skills or it would occur routinely rather than on very rare occasions.
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New Member
 United States
29 Posts |
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Problem....Germany will bailout the EU I think That could be difficult politically speaking. Polls have shown that German citizens DO NOT want to bail out any of the P.I.G.S. (Portugal, Italy, Greece, Spain). Check out this interview with Kyle Bass: http://video.cnbc.com/gallery/?video=3000048868There's a lot of pundits out there, but Mr. Bass is one of the few I take seriously. He knows the Euro situation well. |
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Pillar of the Community
United States
5825 Posts |
If I only knew where the wind blows the next second I would buy at the lowest possible prices and sell at the next peak. But at least I am buying smaller accumulation every time it dips and hope that it will go back up when PM takes another swing upward. The long haul! Well. Hopefully not to long.  |
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Valued Member
United States
493 Posts |
Maybe we get lucky and see prices down to 2009 levels one day. With price swings just this year of a low of 23 and high of 48, you could easily suggest silver may do the same thing it did just a few years ago, except we may end up with a higher low than before.
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Pillar of the Community
United States
4008 Posts |
Quote:
That could be difficult politically speaking. Polls have shown that German citizens DO NOT want to bail out any of the P.I.G.S. (Portugal, Italy, Greece, Spain). Yes, it would be politically very difficult and would likely cost a number of politicians and their party heavily. That may or may not stop it from happening, though. As we all know, once the politicians get an idea in their pointy little heads, it can be quite difficult to get it out of there. There are any number of issues wherein the American people oppose an idea by 70-80% of the electorate, yet we seem to have them pushed onto us anyway. The health care reform of 2010 for one. Although passed by congress and signed by the president, the courts may well have the final say in this matter. |
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Pillar of the Community
United States
2168 Posts |
There are a few articles on a major site (don't know if I can say name) that B of A is predicting another US downgrade and more issues with the EU. You might think these issues would cause PM to go up but who knows since they could be sold to meet other losses and price will lower. Time will tell
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Valued Member
United States
302 Posts |
@Ed
It is my understanding that the P.I.G.S. are Portugal, Ireland, Greece, and Spain while the P.I.I.G.S. are Portugal, Ireland, Italy, Greece, and Spain. Italy has only recently surfaced as an economic disaster, while Ireland was one of the first.
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Pillar of the Community
United States
2168 Posts |
Yes and Italy is a very large economy. I really don't kno how the EU expected all seperate different economies to function on one monetary system backed by nothing. And a lot of the european bonds are hidden in hedge funds here. Anything gets packaged and sold as a great investment. (Take a look at Dead Zone hedge fubds). I explained it to my husband its like painting a rock gold and selling is as the real thing!
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Replies: 17 / Views: 2,602 |
Posted 10/20/2011 03:34 am
