Wednesday, June 01, 2016

Silver Analyst Newsletter Now Out

Issue 44 of our newsletter is now out. The main feature reviews the various public domain technical indicators from the previous silver bulls since 2003. We look at how they performed as long term sell signals and we select the best ones and also reject some of the bad ones. Going forward, the proposal is to use these as part of the armoury for a future exit strategy.

Also included are the usual features in which silver mining stocks are ranked, the stock markets are examined and there is our recession watch section which its own recession indicator.

A free sample issue can be obtained by emailing silveranalysis@yahoo.co.uk with the subject line "FREE ISSUE".
  
Click on the "Buy Now" button to the right if you wish to subscribe for one year.

Monday, May 02, 2016

An Excerpt from my Weekly Update to Subscribers ...



.... but to put things into a longer perspective, look at the chart below. The aforementioned US Dollar Index is charted in green since its inception in the early 1970s when the dollar finally shrugged off any pretence to being linked to gold.






The darker line is simply the index divided by its 200 day moving average. I have drawn a horizontal line through its most significant peaks occurring in June 1981, March 1985, November 2008 and March 2015. Looking more closely at these peaks, the 1981 peak heralded a mere 4 month decline in the Dollar, but the 1985 peak was the precursor to a 7 year decline and the 2008 one to a 3 year decline. It is the perhaps no surprise that the most recent peak last year has so far watched over a 13 month decline.
But how much further will this dollar decline go? My money is on a period more in keeping with seven years rather than mere months. The dollar’s bull days are over; it is time for gold and silver to take the stage again!
 

Silver Long Term Sell Signal Begins its Journey



It may seem odd talking about sell signals at the beginning of a new bull market for silver, but let us get into perspective what bull markets are all about. Silver has seen strong buying in the retail sector as investors snap up silver eagles and similar bullion coins. Likewise, the silver ETFs as a group are near record levels.

The majority of people buying into silver have one objective in mind – selling out of silver at some point in the future. A minority will doubtless be holding these investments for other reasons, but most are in as they perceive silver as a means of capital preservation or appreciation against the return of fiat money inflation.

So, as we prepare to hold silver, the need for an exit plan is required. Do not assume this is something that you only need to think about years down the line, what would your exit strategy be now if you were forced to sell? How would you know when to sell? How would you sell? Speaking personally, I have rethought one aspect of that strategy and that is in what form I hold silver. I address that matter in my latest newsletter, but given the dramatic way in which silver bull markets end, by the time you hum and haw and wonder whether to believe those who say such and such a fall is only a pullback, your profits are already down 20%, 30% or more and they are not going to recover.




The 52 year graph above is something I am now pinning my silver exit strategy on. I would say that though my retirement does not depend on it, how this is used will, shall we say, enhance it. The silver price is in green, but it is the darker line that is more relevant here. I call it the RMAR sell indicator and I will not go into how it is calculated, but it is a simple formula based on a simple principle. I update this indicator every weekend on my spreadsheet, load it into the charting software you see above and update subscribers.

When its value begins to approach a value near 1.40, I will begin to start updating the spreadsheet and chart daily. Why is that? Because I know from past performance that the silver bull market will be near its end. Actually, in my opinion, the next major peak will be the last for a generation as we finally enter that deflationary depression much heralded by the doom merchants.

What the price of silver will be on that auspicious day is anyone’s guess. You may find articles enticing you with price projections in the hundreds or even thousands of dollars for silver. They may be right or they may be wrong. Just remember that no one can prove what they’re saying when it comes to silver price projections.

My approach is simpler, when this indicator rings its bell; you get out without trying to form an opinion on whether the price is “too low” or the clarion calls of those who urge everyone to hold on for even greater profits. I just hope I am strong enough to follow through on that amidst the clamour!
                                                            
As things stand, the RMAR is not surprisingly on the rise. Zooming in on the five year chart below, you can see the finishing line above 1.40 sitting above the current value of 1.06. The RMAR is now pushing up and about to take out a multi-year high. It may seem a short trip to that sell threshold, but anyone who knows silver, will know we are in for a wild ride in the years ahead.





A look at the previous run up from $5 to $50 will remind us that silver is a volatile commodity and that means the RMAR will have some mini-peaks as silver has various mini spikes. However, the 52 year record of this sell indicator has ridden them all out.

Silver is on the verge of big things in the years ahead. Don’t waste it by having no exit strategy!