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Old 09-06-2012, 01:04 PM   #1
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Lightbulb Silver (and gold) poised for a correction

Silver has had an impressive rally during the last 4 weeks. It needs a rest.
It's very overbought (chart as of yesterday, today we added another 1%):



We're now in the 32.5-33 resistance area which could take some time to be taken out.

Lease rates have been falling quite a lot lately which is an indicator of growing physical supply:


Speculative paper postioning (futures/options) has picked up quite a bit as well. These people sell very quickly once a correction starts.

The EUR has rallied quite a bit, too, from 1.20 to 1.26. It's also up for a correction, usually dragging USD-prices of pms down, too.

All in all this points to a high likelyhood of a correction in the near future.
We'll see how much the correction costs us.

-----

All of the above applies to gold, too. The signs (overbought, falling lease rates, speculative positioning, EUR-strength) aren't nearly as dramatic as in silver, though.

-----

Buyer beware.
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Old 09-06-2012, 01:12 PM   #2
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Looking at the last few weeks, I would agree with SA. I am not so fancy with the charts, but I wouldn't be suprised to see silver drop back to $31.50 and gold down to $1650.

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Old 09-06-2012, 01:49 PM   #3
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Silver to drop to 32.50? It's only just reached that today. Up roughly .40 to about 32.65-ish as I write.
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Old 09-06-2012, 02:57 PM   #4
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As I stated a few days ago on another thread, PMs have gone too far too fast after breaking out of the downtrend. Typical markets tend to correct back to the downtrend line shortly after an upside breakout. That means we COULD see 1600 gold again or maybe even 1500, for the LAST time in our lives. And it is feasible to see 26 silver one more time. Will it happen? Only time will tell.

At the outside, the worst (best if you are a buyer) scenario is a 40% pullback from recent highs. I personally do not see any way that can happen at all, just that it is the worst case scenario.

Buy on the dips, and when they stop, HANG ON FOR THE RIDE OF YOUR LIVES.
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GOLD is the money of KINGS.
SILVER is the money of GENTLEMEN.
BARTER is the money of PEASANTS.
DEBT is the money of SLAVES.
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Old 09-06-2012, 03:48 PM   #5
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Mmerlin,
I would love to be a buyer at anything under 37 - 38, but the cutbacks we have been making, and sacrificial givebacks we have done in the name of saving the firm have put a serious dent in the Ancona budget and lifestyle. I intend to sit on the stack and watch from the sidelines until things get a little more stable, or until my firm pulls her shit together, whichever comes first. We actually have quite the nest egg, but Mother Bear will not permit any more stacking until shit changes for the better as regards my work.

All of that said, if we drop all the way back to 25 - 26, Mother Bear can complain all she wants, 'cause I'm stacking more!
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Old 09-06-2012, 04:02 PM   #6
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Ancona, as stated on some other thread, I would love to be a buyer, too. However, also because of business, I will be taking a pass regardless of how low it gets, unless something unexpected happens.
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Old 09-06-2012, 05:12 PM   #7
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Do not sell physical. Take profits and be really to add back.
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Old 09-06-2012, 05:28 PM   #8
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Where's the salivating emoticon?

The wife is back to work after 3 months maternity leave so we'll have some disposable income again. If silver and gold prices drop back to July prices, I'll try to double my position to ~3% of portfolio.
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Old 09-07-2012, 01:22 AM   #9
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It didn't take long before my prediction came true
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Old 09-07-2012, 06:27 AM   #10
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32.31 as I check this morning (my time). Not too bad so far.
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Old 09-07-2012, 07:39 AM   #11
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what just happened to give us a $12 pop in geld ?
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Old 09-07-2012, 07:42 AM   #12
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Originally Posted by rblong2us View Post:
what just happened to give us a $12 pop in geld ?
Unemployment numbers just came out. I am not sure why a drop in the unemployment would cause such a jump? Perhaps more information is forthcoming?
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Old 09-07-2012, 07:45 AM   #13
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Originally Posted by benjamen View Post:
Unemployment numbers just came out. I am not sure why a drop in the unemployment would cause such a jump? Perhaps more information is forthcoming?
Much higher likelyhood of QE beeing announced next week on thursday

Btw: You made a typo, it's a drop in employment not UNemployment
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Old 09-07-2012, 07:46 AM   #14
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sa beat me to it.
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Old 09-07-2012, 08:03 AM   #15
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Originally Posted by swissaustrian View Post:
Much higher likelyhood of QE beeing announced next week on thursday

Btw: You made a typo, it's a drop in employment not UNemployment
http://finance.yahoo.com/news/payrol...3Rpb25z;_ylv=3

UNemployment dropped from 8.3% to 8.1% through mostly funny numbers.

Non-farm employment went up by 96,000.

The scary number is the 63.5% labor force participation number, which is a much better indicator in my opinion. This is the lowest number in over 30 years!
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Old 09-07-2012, 08:14 AM   #16
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Originally Posted by benjamen View Post:
http://finance.yahoo.com/news/payrol...3Rpb25z;_ylv=3

UNemployment dropped from 8.3% to 8.1% through mostly funny numbers.

Non-farm employment went up by 96,000.

The scary number is the 63.5% labor force participation number, which is a much better indicator in my opinion. This is the lowest number in over 30 years!


Labor force participation is the hidden variable in the equation. If this numer had stayed stable since 2008, the unemployment rate would be much higher.
They don't count those who have just stopped looking for work as "unemployed".
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Old 09-07-2012, 08:18 AM   #17
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Originally Posted by swissaustrian View Post:


Labor force participation is the hidden variable in the equation. If this numer had stayed stable since 2008, the unemployment rate would be much higher.
They don't count those who have just stopped looking for work as "unemployed".
I like this guy's work on unemployment:
http://www.shadowstats.com/alternate...loyment-charts

Essentially, he calculates unemployment the way it was originally calculated before it started to be "improved" in the 1990s. Using the unmodified version, he calculates our current unemployment to be 22-23%!
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Old 09-07-2012, 08:35 AM   #18
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I saw the unemployment numbers on ZH and they didnt seem to be such a big deal.
Weve had far worse in the past and pm's went down or were neutral.
Hence my question .........

I suppose the question might be why didnt pm's get pushed down more, if the job numbers were likely to effect thinking on QE ?
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Old 09-07-2012, 08:44 AM   #19
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Originally Posted by benjamen View Post:
Unemployment numbers just came out. I am not sure why a drop in the unemployment would cause such a jump? Perhaps more information is forthcoming?


from
http://www.zerohedge.com/news/reason...h-31-year-lows

Curious why the unemployment rate dropped from 8.3% to 8.1%, even as just 96,000 jobs were added?
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Old 09-07-2012, 09:26 AM   #20
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That was a short-lived 'correction'. It will be very interesting to see how the day plays out and the closing price for the week.
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