I am very interested to see if the market dips a couple thousand in the next 4-6 weeks.
There are two regions between the vertical blue lines ( jan 2012 and 15Mar-May 2012) where USDx and XAG act in the same direction. Question- will Jan 2012 action be repeated NOW, but at higher level?:
Thanks for that lovely chart above. For the scenario you describe to take place, the euro will need to go up. That means Greece needs to be stabilized. This is what I am expecting as I don't believe Greece or any other nation will be allowed to leave. It is far too risky for global markets. There is always the solution that has been used some years....the ECB will be given more money, printed of course by the FED and euro banks will be stabilized. I used to think differently but much has been demonstrated since. So I think its quite possible imo.
Not exactly, in my opinion. EUR will not recover anytime soon, the trend is still down to at least 1,2 , so USDx will move up, but so will silver whatever happens to USDx. Whatever they do in Europe. German people (voters) are exceptionally principal about paying others what they have not earned, and Merkel politically is in the corner. So I expect further delays in action that could save Greece by money printing or even more remotely, Eurobonds. It will come, but always too little, too late at least until next German federal elections, which if it is a regular election, will be held on a Sunday or holiday between 1 September and 27 October 2013.
I've been having this discussion with others at the corner. Do you have an explanation as to how the metals can go up contiguously with the USDX. Could it be that the metals are now direct competitors with the dollar thus negating the previous negative correlation?
Something like this-slowly negating part of negative corellation it away, by sometimes moving in tandem:
Thanks for that. Would you say something similar about the relationship of gold and the USDX. I tend to treat them as very different metals as they have vastly different properties. However silver does a bear a relationship to gold even if not 1:1.
In the end of 2008, with QE1 and actions before official announcement, it took from October 2008 till May 2009 to get USDx from 88 to 79, or 6 months. It took 5 months to do the same from May 2010-Septemeber 2010. To do the same now, as we may hit 88 in June 14th, they will have if announced in June formal QE3 to work (USDx back to 79) only by end of October 2012 if lucky-start of November 2012 ( which I think they will be not and more actions will be needed). That is kind of close to elections, may be too close to risk doing it too late?
So , in that sense, to be effective as a tool to shore up "propaganda economics" it should happen tomorrow as Europe keeps not giving the USA Eurobonds.
This is the chart of USDx with FED uncomfortable line of 88 added and prediction when it will be hit:
In general, the same. May be not exactly in time, surely less volatile growth for gold, and changing GSRs in the middle.. Before current system crashes, gold will be more valuable ( GSR will move up again) then silver. Whether then someone creates a system where gold is devaluated vs. silver and silver brought in into monetary standard at some fixed rate (e.g. lower GSR ) to gold, is up to those who will make the system. But before that,in medium term (4-5 years) or as long as current USD exists , neglecting volatility, on average gold should appreciate vs. USD faster than silver.
I have been focusing on GSR quite a lot. Here is a historic chart showing how starting at least from 2010 lower GSR is always bullish for silver and higher- bearish. Instead of higher GSR being bullish to gold and lower bearish to gold. The relation between gold and GSR is not even closely so symmetric, and it can not be , as silver is, so obviously , its silver prices that reflect ( create) most of the changes in GSR :
As with this price action there is nothing much to do, today I decided to start reading about Technical Analysis ( for the first time, would You believe that?) as I anyway like to study charts and patterns.
So I immediately came up with a bullish pattern for silver resolving all the problems about June 4th-6th:
Is is called Ascending triangle-definition from http://www.stockcharts.com:
There are instances when ascending triangles form as reversal patterns at the end of a downtrend, but they are typically continuation patterns. Regardless of where they form, ascending triangles are bullish patterns that indicate accumulation.
I have overlayed it with Brent crude to see where silver may part with commodities.
Take this with as huge dose of salt as You can handle:)
With this colorful image I wanted to show that in log scale, where silver for 10 years follows its natural exponential growth trend ( which is straight line in log chart) , silver has only ONCE erupted outside the down limit of a channel on which it rests also now.
At the same time, with last 3 minimums it is playing around 50% fibo retracement from the whole ascent since 2002. That is quite a retreat given the fundamentals.
Will it break it again,or situation for commodities in general and silver in particular is NOT so bad as in Autumn of 2008 when USDx was around 88 for 6 months in a row?
Testing different charting tools. This one is from www.freecharts.com.
Then squeezed a bit along time axis without changing trends or amplitudes. I am not ashamed of it, in fact, quite the opposite (prediction-red line, actual-blue line) :
I see here a clear trend that has broken all resistances before next at 1,20. No turnaround in sight.
Since after todays action I have no more doubts that May 16th bottom was the final one, I have the courage to update Silver prediction chart -press right button, View image, zoom- excuse me for my charting quality:
I took away the annoying red April upshot. Seems I have missed the last significant bottom in silver by 2 weeks in time ( too early) and 4 USD in value. But what was reassuring, was that in my chart this was final bottom, so I was so happy to see today ( technicals ( triple bottom reversal on weekly, ascending triangle on daily) plus rapid and consistent divergence from USDx) supporting that finally. I think the green upshoot may be not so much off, as for silver to climb from 28 to 30 in mid June despite further increasing USDx might be not so hard as some imagine. May be two weeks later, and 4 USD below, but it will be moving up steadily from now on with a much higher pullback sometime in July.
These are technicals plus silver /USDx divergence I mentioned in this post:http://www.tfmetalsreport.com/comment/172391#comment-172391
The day has not ended yet but so far today volume is moving up with increase in price. Before that, within ascending triangle , Volume was going down with spikes during Wednesday selloffs.
Press right button-View-zoom to see dates and prices.
Dangerously close to the ascending triangle support line.
In my 3rd day of reading on TA and getting into candlestick patterns I have found a friend who helped me to come up with this interesting observation:
3 weekly hammers in a row on a 144 moving average..which has touched silver chart earlier to its benefit.
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