Tuesday, December 7, 2010

Find Your Investment Voice - Fast!

As expected, the run in silver (and gold) to its upper trading channel has brought forth numerous ‘experts’ providing (dis)information for both sides of the trade. The nearly spiritual rhetoric, largely intended to fleece the public from their funds, can only be compared to the bucket shops in which Jesse Livermoore, one of the world's master traders, learned to read the tape.

Livermoore beat them because he had no personal feels for “the game.” Don't forget that.

They might be crooks or they might not be as black as they were painted. I did no propose to let them do any trading for me, or follow their tips or believe their lies., Reminiscences of a Stock Operator

The number of the ‘experts’ talking about silver (and gold) is increasing by the day. For example, The Silver Market Is Becoming More Volatile -- Could This Be a Bubble?

The real question is why?

The game has changed. Smart money knows it. The COT silver (and gold) shorts, similar to 2005-2006, have their heads squeezed in vice. This is revealed by unusual changes in leveraged money flows for gold and silver market. The “reason” behind the redirection of money flows, while likely debated endlessly on the Internet, will be largely immaterial to profit.

The fact is that silver is trading, better depicted as fighting within an immensely critical (to the shorts) resistance zone of the upper trading channel. If this resistance is broken and tested as support, it suggests that silver will enter a more aggressive, higher-order advance. This advance will be difficult to control.

Silver, London P.M. Fixed:


Gold, London P.M. Fixed:


Why focus on silver? Silver, as expected during hyperinflation, is leading gold. The gold and silver ratio, approaching the target box, is probing levels not seen since 2007. The accelerating decline reflects the growing divergence between perception and reality as it pertains to currency valuation; It represents the evolution of the Weimar experience in America.

Gold to Silver Ratio (GSR):


Those seeking to play “the game” going forward must develop confidence in their investment ‘voice.’ And, fast. Have no doubt that rhetoric will swipe at the voice box in attempt to render it useless.

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