Look, a couple red days are not going to turn me bearish on the PM's or silver in particular [edit: although NFTRH has laid out parameters for a change in course], for that matter. But I think it is well worth reading Bob Moriarty's piece on silver: Facts on Silver. Say what you want about Bob - I rarely read him - but he is giving some sound advice here, regardless of whether or not silver is topping at this moment.
Meanwhile, here is an excerpt from NFTRH133:
Silver Monthly (Linear) & the 35 Year Picture of Gold & Silver
Danger is everywhere; people holding too much USD or other inflated currency,
speculators coming aboard silver and commodities near the tail end of an inflationary
extravaganza, policy makers, who would be indicted for their destructive policies if silver
ends up not being in a bubble blow off… Something is either broken badly out there or
silver is going to eventually crash.
In support of the wild man is gold’s state of relative calm (he’s the stodgy old man after
all). Weighing against silver is the fact that charts like the above never sustain. The
correction, when it comes, is going to be severe. But again, the problem is in the form of
a question; ‘from what level will it come?’ and I am ill suited to provide an answer.
The monthly chart below makes the situation abundantly clear. Taking things a step
further, below that is the very big picture view of both silver and gold, going back to the
last major top as the inflation hysteria of the 70’s blew out into a new bull market in
confidence.
Do these charts make you nervous? If they do not, then I think you may have ice water in
your veins. These charts make me nervous, but as usual, we should try our best to
analyze them to gain some calming insight, if possible.
[charts omitted]
The monthly chart shows us, in a linear fashion, how impulsive the silver move has
become. The 35 year chart shows that and more; it shows silver making a catch up move
to gold (which still outperforms on this big picture) into what is likely to be some kind of
a top for the precious metals. But is it termination with a capital ‘T’ as in 1980? That is
doubtful, as gold and silver lag even ‘official’ inflation data over these decades.
http://www.biiwii.blogspot.com
http://www.biiwii.com
