An In-Depth look at a Major Cycle in Spot Silver

54
Sun, Jul 27, 2014 - 8:27pm

Last week, Turd suggested that I might post an occasional Rhythm and Price video in the Argentus Maximus Blog for those who read the Main St blog or the Setup for the The Big Trade forum to watch and comment on.

So here is the second ever audio-visual AM Blog and the first RNP to appear here in my AM Blog at Turdland!

I hope you all it worth your while and entertaining.

RNP 169 capture40 bey 28072014

Best regards!

Argentus Maximus

The author posts daily commentary on the gold and silver markets in the TFMR forum: The Setup For The Big Trade. More information about the author & his work can be found here: RhythmNPrice.

About the Author

  54 Comments

brent
Jul 27, 2014 - 8:32pm

first

Feels good

dragonfly5
Jul 27, 2014 - 8:33pm

1st?!?!

Just because I can OK _I'll take second . . . . - just came in from a bit of local storm chasing - now to read while listening to the falling rain.

Spartacus Rex
Jul 27, 2014 - 8:42pm

Jul 27, 2014 - 8:52pm

Just to elaborate a bit: The

Just to elaborate a bit:

The cycle I looked at here seems to have been constricted in recent swings in such a way that the upswings were truncated and the downswings enlarged. If the turning (of the bigger picture) is coming round once again, this cycle will reassume a more balanced look.

Not doing this would suggest the big picture is taking longer than anticipated to reverse to the upside. I hope that doesn't happen, but that's one way how I'd know if it were.

In the circumstances nothing would please me more than to see the 75 week cycle enlarge it's upwards swings and make a truncated downswing into it's low. ie an opposite "form" to the recent high for it. That would indicate an increasingly bullish background in the longer term.

So it's time to watch and wait, and I will likely nibble away at weakness buying into lows in trade sizes proportionate to the bullish or bearish tone observed.

Spartacus Rex
Jul 27, 2014 - 8:57pm

@ AM What Are Your Own Thoughts...

on the AU Futures at the moment?

Or are you holding off because the bulk of Gold's contract volume is due to roll from the August contract into the December contract as first notice for August delivery is coming this Thursday?

Cheers, S. Rex


Jul 27, 2014 - 9:06pm

Yes SR, I plan to be watching

Yes SR, I plan to be watching it very carefully as we pass through the last week of the month, and maybe a little overflow into the week after.

I use the amount or lack of "end of contract" price weakness to adjust my bullishness or bearishness to a certain degree. The shape of those smaller cycles also gives a little feedback.

ancientmoney
Jul 27, 2014 - 9:19pm
Bongo Jim
Jul 28, 2014 - 1:46am

5 hours up

And still top 10?

Spartacus Rex
Jul 28, 2014 - 1:54am
Spartacus Rex
Jul 28, 2014 - 2:33am

ZH "London Fix" Gold Rigging...

By Bullion Bank Exposed In Class Action Lawsuit: The Complete Charts

Now that's some 'Serious' Chart Porn!

https://www.zerohedge.com/news/2014-07-26/london-fix-gold-rigging-bullio...

Spartacus Rex
Jul 28, 2014 - 2:35am
Spartacus Rex
Jul 28, 2014 - 2:48am
Spartacus Rex
Jul 28, 2014 - 3:03am
atarangi
Jul 28, 2014 - 4:02am

S. Rex loves to sing along

Ray Peterson - Corinna, Corinna (1960)
atarangi
Jul 28, 2014 - 4:07am

Spartacus comes clean!

END OF THE REPUBLIC?
atarangi
Jul 28, 2014 - 4:17am

S.R.did not have sex with this woman.

You do not have to live in fear!
atarangi
Jul 28, 2014 - 4:33am

Rex plays the Jersey Boys (Shirt Lifters?}

Jersey Boys London perform at The Royal Variety Performance 2008
atarangi
Jul 28, 2014 - 5:09am

Rex's views on paper silver

Hit the road Jack!
atarangi
Jul 28, 2014 - 5:24am

Rex talks about the real "Physical"

Save the last dance for me - The Drifters
Safety Dan
Jul 28, 2014 - 6:06am

AM Great post and video of Cycles

Its interesting how we discussed a couple months ago the likelyhood of Nov 7th date for silver. Your work on cycles in PMs has been most interesting to learn and follow. I continue to learn more about the use of cycles and quants from your postings. Thank you for the opportunity to learn, though I must confess its still over my head.

Other cycle forecasters have that same date selected as we discussed. See this: https://econocasts.blogspot.com/2014/07/20140725-gold-cycle-model-chart....

Sunday, July 27, 2014

2014.07.25 Gold Cycle Model Chart

2014.07.25 Gold Cycle Model

The gold cycle model seems to be suggesting that a multi-year bottom for gold is now past and that gold prices are headed higher with an approximate price maximum of 2700 in the late 2015 time frame.A previous iteration of the gold cycle model can be found here and below.

2014.04.25 Gold Cycle Model

Looks like we get to see into the future, if not the exact day, approximate time frame of changes in the markets. Thanks again..

Question - 5 Sept looks to be an interim top and 1st to 2nd week in November a bottom. What would be the risk ratio for a short position in a future contract or long on reverse silver ETF? Would it make more sense to wait until that timeframe and get out of the money calls in November?


Jul 28, 2014 - 6:57am

Shorting into a market that

Shorting into a market that has already spent 3 and a half years going down, in the expectation of further falls might work out, but I don't think it is a good bet.

Selling a market which is 60% below old highs and has not fallen for about a year (building a base) might also work out, but I would not do that either.

I am attempting to recognize good buying prices and times.

But you mentioned buying options, so I am looking at a multi year swing and timeframe, and you might be looking at catching a 2 dollar drop lasting 5 days. We are not talking about the same subject if that is the case. I do think final falls are due soon, but pullback from final falls is something I would not risk being on the wrong side of, they will be so sudden.

The time to short silver was last year, and doing it next year is far more risky due to lateness of the strategy. Better to ask: "What has silver done last, and what did it do before that, and what did it do before that?" ... until you see a period when it did what it is doing now. Then plan to trade for what followed the last time this present set of circumstances were present. So I believe a 10 year diary is more useful than last week/month/year's news.

I don't think buying calls is a good idea. There was a time when I used to do things like that, but not any more. Pricing of options is heavily loaded against the buyer and is heavily in favour of the seller/writer of the option. I prefer to look at probability of success as well as size of win:lose, and trading long in options is a step in the direction of buying lottery tickets, very lows odds of success but a big highly visible potential prize has been run up the flagpole (by sellers) to attract buyers.

brokerk22
Jul 28, 2014 - 7:03am

AM

I disagree. It depends on the time frame you are talking about. If you are buying leap options going at no less than 1 year, they are usually priced cheaply because volatility is low and can change thus causing a dramatic repricing of that option. If he is buying call options 3-6 months or less, yes, your assumptions are correct. 70% of the time an out of the money option expires worthless less than one year time frame. So yes, this favors the writer/seller.

Safety Dan
Jul 28, 2014 - 7:40am

From Solsson's Forum Post on The set up for the big trade

Thanks for your response AM. Looks like someone else isn't completely bullish yet and watching for downside after learning the hard way..

Now that we’re all BULLISH again, I will throw out a caution in the form of a lesson. Lets take a look at the current view of $SILVER Quite Bullish, right?

This definitely looks bullish, right ? It had a stop run, a reversal, RSI turning up. Held ABOVE the 50sma, so its showing strength! BULLISH. Cant fail- right? Well, we can gain confidence in certain trade set ups, but we never want to get so “Biased” on a trade set up and think that It HAS TO do XXXX. It hurts (and I’ve done it) when we enter a trade thinking its going to do XXXX, and when it doesnt , we hold on “HOPING” that it still will.

Now look at this current chart of SILVER too. (I just noticed that I wrote GOLD…sorry, its late) . Its SILVER. I’m also sorry that its a bit cluttered, but for the sake of showing you something , I wanted to mark it up. The LEFT side of this silver chart from FEB-MARCH of this spring had the Exact set up in Silver as we see now.

Notice it: Do you see how similar the set ups are?

1. Looked like a BULL FLAG

2. Did a “Stop run”, and ‘reversal’ like we just did

3. Turned up ABOVE the 50sma, looking strong

4. RSI turned up

5. THE MACD DID NOT TURN UP

I will be watching $SILVER VERY CLOSELY. We look to have a bullish set up across the board, GOLD, SILVER, MINERS, and some like GG, RGLD, AEM, etc that are really looking strong, but anything can happen. I am watching the MACD & a few other indicators on Silver as we move forward.

https://www.chartfreak.com/2014/07/26/tiny-bit-bull/#more-969


Jul 28, 2014 - 7:43am

Very true. The longer the

Very true Broker22. The longer the option life, and the closer to the money, (or actually in the money) the strike price is, the closer trading options longside gets to trading futures. Alternatively one can trade the cash market at 1:1 leverage using leveraged money (via a conventional loan or overdraft). But borrowed money or leverage usually weakens the stop setting process - discipline needs to be good.

Robski
Jul 28, 2014 - 9:45am

Thank you Argentus

I find your work on cycle theory to be very educational for me. Again, thanks.

Marchas45
Jul 28, 2014 - 10:00am

Well I Viewed It AM

But for the life of me I just couldn't get it. Lol It all went over my head, at least I tried. Guess I'm getting to old to learn the Cycles, only the ones with two wheels and later three. Lol Keep Stacking

buzlightening
Jul 28, 2014 - 11:49am

Wouldn't hold your breath short term on any big metals move.

Metals OEX today and then goon speak from yellen wed from f*mc. After we get the planned slug fest over in metals, we still have employment mark to fantasy bull shit numbers FRYday. All the SOP stacked against the metals this week but it's certain the paper pulp fiction criminal crowd is running out of viable props beside jackass jawboning debt is wealth, to keep the ponzi from vaporizing. It all just keeps accelerating until one day we'll wake up and the old corrupted system will be but a hiss and bye word. No entity taking paper asset debt based promises as collateral, the substance rehypothecated 100s of times for worthless contracts. Once the debt gets called in it's curtains as there's nothing to stop the collapse. No criminal entity in the ponzi go round wants to be suicicided and collapse the system. It goes until it can't anymore. The debt saturation levels on interest rates swap derivatives over heating like a nuclear reactor in meltdown. Whatever the timing it will be very much under the last 3 years of metals price suppression of all in by the bullion banksters. This time there's nothing but the truth to keep the metals in play and who holds real value going forward, those hold debt as wealth or those holding assets of genuine substance as wealth. Physical gold and silver being the best choice for preserving wealth.

SS121
Jul 28, 2014 - 11:56am

what gold??

they tell us ALL THE GOLD IS GONE (again,again, and again).

and then... Maguire: Hundreds Of Tons Of Gold Bought By East In 14 Days

Thorus
Jul 28, 2014 - 12:13pm

AM - Thanks for the info

AM,

Thank you for the info. I've currently got my IRA and 401k sitting in cash, and I'm looking for the right time to buy back in to metal related stocks/ETFs.

I was figuring that we had a ways down to go yet, but I didn't have a systemic way of estimating where that bottom might be.

This looks like a useful tool to help me with the process.

Much appreciated.

Best Regards,

Thorus

Green Lantern
Jul 28, 2014 - 12:16pm

US investor sues three banks

US investor sues three banks over silver price

J. Scott Nicholson seeking to bring a class action lawsuit against HSBC, Deutsche Bank and the Bank of Nova Scotia

https://www.bbc.com/news/business-28509979

https://www.theguardian.com/business/2014/jul/27/silver-price-investor-sues-hsbc-deutsche-bank-nova-scotia

Don't hold your breath

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