Time to Focus on Silver

[Weatherman]

This is music to my ears!

Time to Focus on Silver

It is not exactly groundbreaking analysis to say that whats good for Gold is generally good for Silver. As observers of the precious metals know, Silver tends to lag Gold but eventually catches up quickly. In the long-term sense, Silver is still a year or two behind Gold as Gold has broken above all resistance levels. Technically speaking, we do favor Gold over the next few months, but ultimately, Silver is poised to catch up with vengeance.

Here is a great 40-year Silver chart from Nick Laird at sharelynx.com, with my annotations.

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This long-term chart shows $15/oz as a critical level. Silver rebounded strongly from $15 earlier this year and is soon to attempt to break $20. A clean breakout and Silver should reach $25, which is its final long-term resistance.

This brings up the question, when will Silver break $20/oz?

2376


The above chart provides some helpful hints. First, the 40-week bollinger bands are nearly tight enough (as in previous breakouts). Second, Silver has held above $17.50 despite numerous attempts to go lower. Finally, Silver is performing very well in relative terms. Silver against both currencies and commodities has already broken out past its 2008 high. On the other hand, Silver has yet to breakout against Treasuries. We are keeping an eye on that ratio as it could confirm a sustained breakout in Silver past $20/oz.

Of course no one can predict the future. We try and assess what is probable and what is unlikely. Given the macro backdrop, Gold and Silver should continue to outperform going forward. When we look at the technical backdrop for Silver, we see what is "probable" should the metal eclipse and hold the $20/oz barrier.

http://www.safehaven.com/article/17204/time-to-focus-on-silver

[Unsustainable]

Whose got popcorn? ;)

[917601]

I posted these before-silver is not going to "pop" until oil does.They are for some reason tied at the hip.But, rest assured, it will pop.If you are not a big gasoline user, you may make some positive gains.

[Weatherman]

I posted these before-silver is not going to "pop" until oil does.They are for some reason tied at the hip.But, rest assured, it will pop.If you are not a big gasoline user, you may make some positive gains.
I think you might have been able to make a stronger case for silver and oil moving together before early 2008, but silver has been clearly stronger than oil since then. In the charts of your post, crude is about the same price as it was in April 2006, but silver is much higher than its 4/2006 price. The ratio chart below shows that silver can gain multiples on the price of oil. It is worth noting too that many of us believe that the price of silver is manipulated to hold its price down, but I have not heard anyone make the case that the price of oil is manipulated to consistently keep a lid on its price. When that manipulation is finally ended by the market because of a shortage of physical silver, the explosion in the price of silver can leave oil back in the dust. :wink:

2379

[917601]

I do not have to make a case-the 10 year charts do.Time will tell, for now it seems NYMEX crude is inversely caught up in the Gulf spill. I suspect they will even out as a silver quarter today is worth $3.40 and gas $ 2.84/gal. in my location.
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IN 1964 you could buy gas for your car at .25 a gallon in most states in america.

1964 was the last year that the U.S. Minted Quarters with 90% silver.

Today a 1964 Silver Quarter is worth about 2.38

With gas selling for about 2.28 to 2.40 a gallon .

A 1964 silver Quarter will still buy a gallon of gas for your car.

Have you learn anything here today.

THE U.S. is still making 100.00 bills at a cost a cent and a half. Yes it cost them .015 each to print 100.00 bills.

THEY are not making any Silver Quarters.

I have some 1964 Quarters... Do you?

http://www.fastcoin.com/25cents.php
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[VTEEZER]

I do not have to make a case-the 10 year charts do.Time will tell, for now it seems NYMEX crude is inversely caught up in the Gulf spill. I suspect they will even out as a silver quarter today is worth $3.40 and gas $ 2.84/gal. in my location.
---------------------------------------------------------
IN 1964 you could buy gas for your car at .25 a gallon in most states in america.

1964 was the last year that the U.S. Minted Quarters with 90% silver.

Today a 1964 Silver Quarter is worth about 2.38

With gas selling for about 2.28 to 2.40 a gallon .

A 1964 silver Quarter will still buy a gallon of gas for your car.

Have you learn anything here today.

THE U.S. is still making 100.00 bills at a cost a cent and a half. Yes it cost them .015 each to print 100.00 bills.

THEY are not making any Silver Quarters.

I have some 1964 Quarters... Do you?

http://www.fastcoin.com/25cents.php
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Those figures are a little off but close enough to illustrate the point. Gasoline is going to 7/gal and silver is going to 35-40/oz when that happens. Silver and gas long term track closely as anyone that's been around a while knows. it may take up to a couple of years but it's going to happen. The cost of this oil spill is going to be so astronomical that the whole oil industry will have to help pay for it and the costs will be passed down as always to the consumer.

[ccjoe]

Labor Day is the time when "parabolic" comes into main st. jargon as to what will be happening to silver.

[southfork]

Labor Day is the time when "parabolic" comes into main st. jargon as to what will be happening to silver.



What's special about Labor Day?

[ccjoe]

What's special about Labor Day?

This sideways activity can NOT go on forever and LD is just ball park GUESS by me.
No one really knows when the panic buying of silver will commence.

[Saul Mine]

I advise against focusing on silver. So much of the encouragement we get is couched in terms used by stock suckers. Holding physical metals is very different from playing with stocks.

The stock sucker is a nice fellow who buys stocks because he hears about them from his friends. If the price goes up he gets bragging rights; if the price goes down he gets sympathy. He is mostly in the business to buy friendship.

The metals bug carries a noticeable attitude. It is such a prominent attitude that he is called a bug, or worse names. He always considers whatever analysis is available, but he does not seek anybody's advice. He seldom or never cares if the price of his holdings goes up or down. If it goes down he says it's on sale, and if it goes up he doesn't care because he does not plan on selling any time soon. He mostly keeps track of the ratio between his holdings and whatever he plans to move into some day; that is to say he has an exit strategy even before he enters the market. He might not remember the DJIA, but if he plans to buy stocks when times get better he will certainly keep track of the DOW/GOLD ratio. If he plans to buy real estate he keeps track of ounces/acre.

You would completely miss all that if you merely "focus" on one or another metal.

HERE (http://www.gold-eagle.com/editorials_08/nielson062210.html) is an interesting essay from a stock sucker who just figured out about the ratio. He gets his arithmetic goofy though: GSR 62:1 does not mean 62% silver. It means buy 62 ounces of silver for every ounce of gold. When the ratio drops below 50 you are going to swap all your silver for gold, and when it gets back to 70 or so then you swap all your gold for silver. Keep doing that until you feel like you have enough.

[Gcubed]

I advise against focusing on silver. So much of the encouragement we get is couched in terms used by stock suckers. Holding physical metals is very different from playing with stocks...



Very well put.:2:

Silver sucks for now and may well continue to do so until our economy roars once again. I'm focused on gold acquisition. Silver deals add to my gold stash. :cool1:

[Metalophile]

Actually the US Mint does still make 90% silver quarters - in its annual silver proof sets.

[AgShaman]

The regulators and Fin Reg. move slowly...and ineptly for a good reason...they are still beholden to their masters (JPM).

Some say the inverse head and shoulders from earlier this year is providing the cup body (if you follow charts) and that now from silvers recent support holdings, the handle is forming. I really don't know as I've not the experience to read charts and interpret them via T/A. I do enjoy looking at them though and tracking the thoughts of the people that provide them....so thanks to Weatherman and the rest of the Cats that provide them here.

With so many watchful eyes policing market activities these days...my gut tells me JPM and their bullion bank buddies will need more time for their proxies ("significant others") to provide the back-up plan and enter silver on the long side for them so they can eventually exit their shorts with their solvency still intact. I cannot verify these happenings either...it's a "gut hunch", but then so is alot of prognosticating of market machinations. I do think these Shylocks are manipulating the price of silver down and that they will be unable to do it for much longer...I'm not worried, as I will not be missing the train when it moves north of $20 or $25...whatever the magic number is? A bigger question for me is whether or not the precious metals arena can even enjoy the manic stages of a "parabolic move" without the world unravelling into chaos. The longer is stays below $20...the longer I can load up with sizeable purchases using paper with green ink in cash amounts below 10k.

Curiosity will not kill this Cat!

[JayDubya]

Saul, you seem to have it figured out. I agree with your assessment, especially trading the ratio, but I will say, in defense of the OP, that one can focus on silver while still not losing sight of, or maintaining a healthy interest, in the other arenas.

[MISRy]

When the ratio drops below 50 you are going to swap all your silver for gold, and when it gets back to 70 or so then you swap all your gold for silver. Keep doing that until you feel like you have enough.

Hey Saul. Did you get any love when it was 70 a few weeks back? Everyone I traded with wanted to call it spot for spot but my math showed 70:1. Now I just want it to go down by the winter so I can give fractionals for gifts as opposed to bars and tubes, (boys like Eagles and girls like Pandas).

[ccjoe]

Hey Saul. Did you get any love when it was 70 a few weeks back? Everyone I traded with wanted to call it spot for spot but my math showed 70:1. Now I just want it to go down by the winter so I can give fractionals for gifts as opposed to bars and tubes, (boys like Eagles and girls like Pandas).

Just my opinion but my wife and I NEVER give silver for gifts as they wouldn't be understood and if they were, it would create resentment. Just us as some people aren't afraid if people know they're carrying> not guns but 100's of lbs of silver like a lot of us.

[Irons]

60:1 and under is when I start trading. 50:1 would be ideal but it seldom gets there.

[MISRy]

Yeah, after the swapping the other day the kitty is right at 30:1, I prefer it to be more like 15:1. I'm wanting a 60:1 GSR late fall/early winter so my gift fractionals are covered. 1/10th eagles, 1/20th Pandas, etc. are getting respect from even the most liberal of the in-laws. It seems fewer and fewer people see Greece as being half a world away anymore.

[Russkie]

How do you folks calculate your ratios with different commodities? Do you get it somewhere online, or do the math yourself after having collected the info?

Saul indicated the dow, etc. what are the ratios you all look at?

The ratio for real estate is intriguing. Any comments on your area?