Out of balance

There is a great natural edge for traders in the sense that nothing stays in a state of extreme for an extended period. Therefore, when things are out of balance in the trading world it equals opportunity. The more extreme the situation, the bigger the opportunity. This is why in market crashes huge fortunes are not only lost but often gained as well. What we are referring to today is the gold to silver ratio. Long before we had currencies in the form of coins & notes there was already barter with precious metals. As such, the relationship of how many weight units it took in silver to purchase one weight unit in gold was established more than thousand years ago. There is an ample record about these relationships for all this time span. They literally have always between the ranges of about 10 to 20 units of silver purchasing one unit of gold. When these measurements were on their extreme points they always returned back to to their equilibrium. Now look at this:

Gold To Silver Ratio, Monthly Chart: Out Of Balance

Gold to Silver Ratio, monthly chart as of May 6th, 2020

This isn’t even close to the typical ratios we have found consistent for more than thousand years. This is way off. We find ourselves in extreme times of change and the markets are always reflective of the worlds state. Market crashes are not sustainable neither are pandemics or anything truly extreme as well. So in our humble opinion these imbalances will find a mean again in the future. When the extremely undervalued silver prices (which currently require over 110 ounces to purchase one ounce of gold) bounce back, a person who owns silver will wear a big smile.

Gold, Monthly Chart: Overbought? May Be Not

Gold in US Dollar, monthly chart as of May 6th, 2020

Looking at the monthly gold chart one could think, that one way to take advantage of this scenario is shorting gold. We are approaching a double top formation = resistance. If you think of it though, this might not be your best bet. Fundamentally, gold is getting stronger by the day since governments in unison seem to be running the printing presses in full speed. That means the underlying fiat currencies get deluded. The strength we see on a daily basis on how this precious metal is traded with its shortages on physical deliveries rather suggest an additional edge. We do not see gold as overbought just yet, so a catch up scenario is likely. Meaning when prices of gold should rise, silver has to catch up even more.

Silver, Monthly Chart: The Other Side Of The Coin

Silver in US Dollar, monthly chart as of May 6th, 2020

If you glance at the monthly chart of silver you see the other side of today’s principle observation. Silver on the larger time frame is trading very close to its mean (yellow line). This is its balance point and means that it has room to move; it can get out of balance. It did just that at the previous market crash 2008. But we see today’s extreme far more significant than the world’s situation in 2008. That being said, we could make the bold assumption that silver could get way more out of balance than it did 2008. We could see a true run up. We discuss principles, edges, market behavior and trading execution timing on a daily basis in our free telegram channel and invite you to these discussions.

Out of Balance

Human behavior repeats itself and as such historical cycles tend to repeat themselves. What is an even stronger force to rely on is natural laws. Extremes are simply not sustainable for the long term. Today’s chart book isn’t a fine precision opportunity in regards to timing, but in times of such extremes, where the future of next generations are endangered, long term planing ahead is vital. We do not know if our children will find a world as free as we have inherited it. We do not know if fiat currencies will survive. There is no certainty that governments can guarantee our retirement. We are at the cusp of great change in many aspects. But we can do our best to combine natural laws like compound interest and today’s topic to create financial abundance for our children´s future and our retirement. Owning in parts some physical silver seems to be such an opportunity to make a prosper future a reality.

Join our free Telegram Group :https://t.me/joinchat/HGe22hDDEEl0LvFGAgEZ9g

All published information represents the opinion and analysis of Mr Korbinian Koller & his partners, based on data available to him, at the time of writing. Mr. Koller’s opinions are his own and are not a recommendation or an offer to buy or sell securities. Mr. Koller is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations. As trading and investing in any financial markets may involve serious risk of loss, Mr. Koller recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications.

Although a qualified and experienced stock market analyst, Korbinian Koller is not a Registered Securities Advisor. Therefore Mr. Koller’s opinions on the market and stocks can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction. Past results are not necessarily indicative of future results. The passing on and reproduction of this report, analysis or information within the membership area is only legal with a written permission of the author.

Important Trading Risks and Earnings Disclaimers - Terms of Use

RISK DISCLAIMER: All forms of trading carry a high level of risk so you should only speculate with money you can afford to lose. You can lose more than your initial deposit and stake. Please ensure your chosen method matches your investment objectives, familiarize yourself with the risks involved and if necessary seek independent advice.

U.S. Government Required Disclaimer - Commodity Futures Trading Commission. Trading financial instruments of any kind including options, futures and securities have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the options, futures and stock markets. Don't trade with money you can't afford to lose.

NFA and CTFC Required Disclaimers: Trading in the Foreign Exchange market is a challenging opportunity where above average returns are available for educated and experienced investors who are willing to take above average risk. However, before deciding to participate in Foreign Exchange (FX) trading, you should carefully consider your investment objectives, level of experience and risk appetite. Do not invest money you cannot afford to lose.

EARNINGS DISCLAIMER: EVERY EFFORT HAS BEEN MADE TO ACCURATELY REPRESENT THIS PRODUCT AND ITS POTENTIAL. THERE IS NO GUARANTEE THAT YOU WILL EARN ANY MONEY USING THE TECHNIQUES, IDEAS OR PRODUCTS PRESENTED. EXAMPLES PRESENTED ARE NOT TO BE INTERPRETED AS A PROMISE OR GUARANTEE OF EARNINGS.

CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAN ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.

All information presented or any product purchased from this website is for educational and research purposes only and is not intended to provide financial advice. Any statement about profits or income, expressed or implied, does not represent a guarantee. This presentation is neither a solicitation nor an offer to Buy/Sell options, futures stocks or securities. No representation is being made that any information you receive will or is likely to achieve profits or losses similar to those discussed on this website. The past performance of any trading system or methodology is not necessarily indicative of future results. Please use common sense. Get the advice of a competent financial advisor before investing your money in any financial instrument.

Terms of Use: Your use of this educational website indicates your acceptance of these disclaimers. In addition, you agree to hold harmless the publisher and instructors personally and collectively for any losses of capital, if any, that may result from the use of the information. In other words, you must make your own decisions, be responsible for your own decisions and trade at your own risk.

Recent Posts

Stay Up-To-Date with New Posts

Search By Tags

join my free

telegram Group

Mentorship

packages

download my

free book