GSR is now under 40...
Wingsrule
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As I type:
1434.90 / 35.93 = 39.94
How low will it go?
1434.90 / 35.93 = 39.94
How low will it go?
0
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<< <i>As I type:
1434.90 / 35.93 = 39.94
How low will it go? >>
D'oh.
In the lifetime of some people alive today it will go under 1.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
<< <i>Sounds like silver is overvalued in relation to gold based on recent GSR history. >>
Ding ding ding
We have a winner!!
Gut feeling? A huge smackdown coming down the pike
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The GSR is in a C leg down from it's 2008 peak of around 90-93. This current leg shows no signs of relenting as of yet. ADX is still widening, volume is still downtrending or at best flat, stochastics are locked in well below 20 with no sign of curling back up. Also note the current leg still hugging the downtrending lower bollinger band.
C legs in gold tend to be 5 waves down but GSR waves are particularly difficult to count, even using a faired in line graph. I can't figure out a reasonable count.
The previous GSR legs lasted from 9-12 months each. The current leg seems to have started from around August and is about 6 months in length. If I start if from July that's a bit over 7 months. In any case, another 1-2 months of this run is quite feasible and would rhyme with seasonality peaking in May, possibly June. Volume turning back up, stochastics breaking 20, or turns in ADX or accumulation should signal a trend change. The volume change tends to be the best indicator imo. But not of that showing yet on the weekly chart. The daily chart is showing a very sight negative divergence in the stochastics, possibly in the volume, but very faint still.
roadrunner
Who knows - at this point 30:1 is quite feasible - $1500:$50.
<< <i>Sounds like silver is overvalued in relation to gold based on recent GSR history. >>
Maybe gold is undervalued in relation to silver?
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
<< <i>roadrunner can you say that in english? >>
GSR still bullish which means silver outperforming gold for a while yet. I think the GSR can easily reach the 17-25 range before the PM bull market ends (highly dollar dependent).
But before getting there this 30 pt drop will no doubt get corrected along the way. A 10 pt or higher bounce is certainly possible.
roadrunner
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
<< <i>
<< <i>Sounds like silver is overvalued in relation to gold based on recent GSR history. >>
Maybe gold is undervalued in relation to silver? >>
Absolutely.
I've written that at 45x I would move silver positions into gold. That doesnt mean that silver cant go higher or even make a parabolic spike. Many people still looking for ancient levels of 16:1 or 20:1. Perhaps they many even get it. However, I would imagine that the ratio could easily be 25x in the morning, 16x at noon, and 25x at dinner. Thats the markets work. In cases like that, which I fully expect to happen, paper silver holders will have the opportunity to top tick, while physical holders will not. Example, just suppose gold hits 1600 and silver 80 for a 20:1 ratio. 90% junk would be worth about 57x face, but holders will be very hard pressed to get 45x (or $63 equiv) if they went to sell.
You gotta be nimble in these markets.
Knowledge is the enemy of fear
Just eyeballing the above chart, a ratio of 32--1983 low--would/could be 1600 gold and 50 silver. If both continue at current rate of advance, this is plausible. Silver could match its all-time high and 30 yr low GSR. Hmmmm, interesting opportunities abound.
Knowledge is the enemy of fear
That's a 25 yr ABC in progress (1991-2016?) with a very long 11 yr B leg that ended during the crash of 2008. Considering that the fundamentals for silver may have drastically changed since 1980-1983, we might have to throw the chart away for the past 30 yrs. How do you chart something where supplies are running out? Why couldn't GSR even drop to 10 to match historical gold and silver quantities found in the earth's crust? But just mimicking the 40% drop of the 1991-1998 A leg. This current C leg could comfortably fall to 35. If it intends to make 5 legs like the A wave did, then there are many years left in this downtrend, and lots of swings to shake people out. There was as much physical silver as you wanted back in 1980. That doesn't seem to be the case in 2011.
roadrunner
How do you chart such a thing against a unit where supplies are endlessly increasing?
Dang, I'm scaring myself.
I knew it would happen.
<< <i>How do you chart something where supplies are running out?
How do you chart such a thing against a unit where supplies are endlessly increasing?
Dang, I'm scaring myself. >>
Good point. Sometimes we forget the obvious.
The Dow has lost 86% vs. silver over the past 10 yrs. And it's far from finished yet. If comparing against the dollar, that number is probably >90%.
Wasn't paying attention to milk prices lately but found out today that milk futures are up 45% since mid-December. Yowser.
Even Bob Hoye who was recently bearish on gold, silver and the GSR....has now turned bullish again....at least for another couple of weeks.
roadrunner
If possible... could you please post that chart back another five years?
Yes, inflation is becoming obvious. They can't hide it any longer and no one believes Tim and Ben when they lie under oath to Congress about no inflation.
Wait till panic buying of silver starts, probably later this year.
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The last chart in this sequence is the 36 yr chart. What I find the most interesting is that a general uptrend could be drawn across the chart if the 1980 and 1998 spike lows were removed. But the recent action has violated this uptrend/neckline. Multiple head & shoulders pattern here with a neckline basically at around 40 when GSR peaked at 100 in 1991. The the price projection conveniently works out to be 16. Now that's a very familiar number! When necklines are broken one would normally expect one final back test of that line. In this case that's 60 or higher or a 66% retrace of the recent drop. Anything's possible but to me that would be hard to fathom at this point.
Sam Zell on the economy and inflation
Real estate and newspaper billionaire Sam Zell is a pretty down to earth guy. His investment group bought out the company I used to work for during a Chapter 11. He doesn't think inflation is at 2%. A good 5 minute video where he was interviewed by CNBC talking heads.
roadrunner
<< <i>While silver is certainly surprising, the GSR falling is also reflected by gold being stuck under $1450. 40:1 would have had gold at $2K and silver at $50 by my guess, not $1440:$36.
Who knows - at this point 30:1 is quite feasible - $1500:$50. >>
me thinks we will have a 40:1 of $2K-$50