Monday, August 18, 2008

Silver Bad Quad





Lets go back to the trite "Good News, Bad News" dialog. Its worse than Abbott & Costello, trust me on that......







QUADS ARE POWERFUL and this is ALARMING ! ! !

BAD QUAD, BAD QUAD. Notice I did NOT say BEAR QUAD. That is the good and bad news, IMO. The good news is that the support is so deep here for silver, that probably not even a quad bottom breakout could violate it. The bad news is that so many "bulls" in the silver camp were looking at the "grass is greener" scenario's, that this intermediate correction will leave them as prime cuts of aged beef, hanging in a cold walk-in box, before the next upwave arrives. I am going to guess it will be a matter of volatility rather than a matter of time. The reason being is that a return to SINGLE digit silver prices will no doubt cause a stampede. A stampede could easily turn into a rout, and therefore a price cascade. OBJECTIVITY, hopefully will keep some bulls from becoming Prime Rib for a epicurean bear dinner.

On one of the accompanying charts, the 45 degree blue line shows SUPPORT for Silver in the $6's. YES SIX DOLLARS per troy ounce of Silver. Will it go there? IMO, maybe in a spike. Will it stay there ? Probably not given the dynamics and fundamentals of the suppy and demand in the world, IMO. The fundamentals are clear, even if the dynamics are not.

Will you get injured? Will your positions get damaged? That depends on your own capacity for: OBJECTIVITY; and DENIAL? Will you be able to profit from this move, one or both ways. That depends on your OBJECTIVITY and AGILITY. Will you have CASH enuf to exploit these moves? REPEAT AFTER ME: I will be OBJECTIVE; I will NOT be in DENIAL ; I will maintain an posture of poise and agility.

It is clear that the market has a mind of its own. Are there those amongst us who can march in step with this market, or will we moan and groan because the market is out of stop with us??

For all you old TV fans, where the 6 0'Clock Anchor guy would sign off with a big story with the phrase: "Film @ 11 PM", I can only say, "Digital Updates ASAP" ! ! !

We should watch VERY carefully for any rally attempt from this level...Its success or failure to thrive could present us with a great deal of information.

DG

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