Important patterns for silver
Typically, professional market players spot early warning signals that the overall market might be topping by the following sequence. First, the housing market starts to flatten out. Next, investors clean out their portfolio of the small stuff, hence the Russel 2000. And finally, the major indices like the S&P and the Dow roll-over. This time around, we do not only have inflated markets, but multiple market cycles overlapping. It includes a hundred-year cycle of a possible change of the leading world power position and a wealth transformation. What does this mean for wealth preservation timing? Important patterns for silver.
It might be different this time around because the housing market isn’t your best bet as the earliest warning signal. With possible hyperinflation on the horizon, the housing market as a “money to commodity” transfer might be lagging. Consequently, we have to look at the Russel 2000 first:
Russell 2000 in US-Dollar, Monthly Chart, Early warning signals already present:
Russell 2000 Index in US-Dollar, monthly chart as of August 20th, 2021.
What also might be different is that typically, greed changes to uncertainty and uncertainty changes to fear. It means that markets trade up, then sideways, then down. Be alerted this time that human nerves are already frail. People struggle to make ends meet, and the limitations due to Covid have strained personal lives. It could mean that we might not see a typical roll-over, but rather an exuberant top and a sharp reversal from greed to fear without the usual sideways reaction time.
The monthly chart above shows what’s typically called a blow-off top from a very steep, sharp move up (from US$966 in March last year to US$2,360 in less than twelve months, a 144% move), that could collapse anytime. The double top formation right now could very well develop in a down move.
Weekly Chart, Gold to S&P 500 comparison, Quick recoveries in troubled times:
Gold to S&P 500 index comparison, weekly chart 2008-2009
If we see a sharp market decline, precious metals are typically drawn down due to margin calls needing to be covered by freeing liquidity from this sector. However, once gold and silver find their bottom, they tend to rally early out of which a more robust and longer-term uptrend can emerge.
The weekly chart above shows that in the last market crash in 2008/2009, S&P500 prices fell dramatically and dragged gold (blue line) down as well. But then gold turned up from its double low in late October and early November 2008, way earlier than the S&P500, where prices continued to decline for another five months.
Gold to Silver comparison in US-Dollar, Monthly Chart, Gold, a leading indicator to silver:
Gold to Silver comparison in US-Dollar, monthly chart as of August 20th, 2021.
Another unique pattern is the delay between the gold to the silver move. When gold breaks out, it takes a while till silver follows, a great way to time ones’ positioning into the silver market. With silver providing more bang for the buck (=percentage moves), it is an ideal trading instrument to, besides holding it physical long term, trade it as a “booster” within one’s wealth preservation portfolio.
The chart above shows how gold breakouts are followed by Silver breakouts with quite some time delay. Consequently, gold on the longer term time frames is a leading indicator for timing silver entries.
Gold in US-Dollar, Monthly Chart, waiting for the signal:
Gold in US-Dollar, monthly chart as of August 20th, 2021.
Regarding timing, we see gold as the leader within this next turning point, and as such, silver is timed alongside once gold has shown solid confirmation of a larger time frame cycle long entry.
That being said, we would want a gold price trading above US$1,815 in September and then prices of silver building a low-risk entry pattern on a weekly chart with prices above US$23.23 for long entry considerations.
You will find more detailed silver entry setups for September coming up in our future weekly chart book publications.
Important patterns for silver:
We wish market play would be as simple as providing support and a resistance line, simply stating: enter here at…, and get out here at… Many try to make you believe just that, but this chess game is more complex and requires market observation. With your family’s future at stake in exceptional times, we find each minute given to market education time not wasted. We try to support you in demystifying the markets and hope you find your profitable patterns to identify low-risk opportunities.
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.
Comentarios