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« Silver As Currency | Main | Greek Debt Swap: Not exactly a solution »
Sunday
Mar112012

Long-term Silver Chart Analysis Indicates Why Silver Is Likely To Pass $150


In a previous article, I wrote about the shift to measuring wealth in ounces instead of Dollars. In that same article, I expressed my opinion that I consider silver bullion to be one of the best current opportunities to increase one’s gold ounces.

Here, I would like to point out some interesting signals on the long-term chart for silver.

Above, is a long term chart for silver:

On the chart, I have highlighted two fractals (or patterns), marked 1 to 4, which appear similar. What makes these two fractals so special, is the similarity of the circumstances in which they exist.

There was a significant peak in the Dow (1973 and 2007) between point 1 and 2 of both fractals. Both peaks in the Dow came about 7 years after the peak in the Dow/Gold ratio. After point 2, on both fractals, the oil price made a significant peak (1974 and 2008), about 8 years after the peak in the Dow/Gold ratio.

Thanks to this similarity in events, as well as the similarity in sequence, I was able to identify the great possibility for significantly higher silver prices, back in October of 2010. This was a very clear signal that higher silver prices were coming, and that is exactly what we got, when silver moved to $49. However, this run is not over yet. The move from $17, when silver broke out of the triangle (at point 3 of the second fractal) to $49 was just the first part of the move. In my opinion the biggest and best part of this move is still ahead. In various previous articles on silver, I have presented a lot of evidence to support my opinion for higher silver prices over the coming years.

Based on the fractals on the chart, we could still have about two years before we could get a top like we had in 1980. That is 14 years after the Dow/Gold ratio top (beginning of 1966 to the beginning of1980 vs the end of 1999 to the end 2013).

Also, from a price point of view, there is also an indication that this move is not over yet. If the two patterns indicated continue their similarity, it would be reasonable to expect the final top of the current pattern to at least go higher than $140. Why? If you measure the price movement from point 1 to point 2, in the first pattern, and compare it to the price movement from point 4 to 5, in the first pattern, you will find that the movement from point 4 to 5 is at least 7.6 times larger.

Currently the movement from 4 to the $49 in April of 2011 is only about 1.65 times larger than the movement from point 1 to 2. If it follows the first pattern, and grows at least 7.6 times larger, it will comfortably pass $150.

The chart above and the following explanation is courtesy of Hubert Moolman who you can reach via this link, just click here and also thanks to www.SilverSeek.com for drawing it to our attention.

Regarding www.skoptionstrading.com. We are off to a good start this year closing two trades in January, the first gave us a profit of 71.58% and the second gave us a profit of 33.97%.

It was nice to bag a couple of winners before January ended and hopefully 2012 will continue in a successful manner. We do have a number of ideas on the drawing board which we are looking to execute shortly, but only when the risk/reward environment is firmly in our favour.

Please be aware that discussions are taking place regarding an increase in the price for this service for new members. We have looked at about 100 similar services and the average cost for them is $866.00 per year. This price increase will not affect the current subscribers whose subscription will remain unchanged.

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