by Gary Christianson, Miles Franklin:
Miles Franklin sponsored this article by Gary Christenson. The following are his opinions and are not investment advice.
Breaking News: Paper silver prices rebounded since early June, but fell back on Friday, July 5, to $15.00.
Read:
Silver Prices—The Next Five Years, and
Gold Prices—The Next Five Years.
These articles describe empirical valuation models for silver and gold prices based on three macroeconomic variables. They conclude that silver prices are substantially undervalued (almost 40%), and gold prices are somewhat undervalued as of July 5, 2019.
But valuation models are not timing models. They show when macroeconomic fundamentals suggest that metals prices are too low or too high in the “big picture.” However, metal prices can remain under or overvalued for years. Long-term investors buy silver and gold when they want insurance against loss of purchasing power, central bank predations, governmental intervention in markets and economic crashes.
A Timing Indicator.
If you day-trade, you compete with non-human algos that act in microseconds on information unavailable to most people. This trading is dangerous for most individuals.
If you occasionally trade a portion of your silver stack, many timing tools are available that help buying low and selling high.
One is the “Summation Indicator” as described below. You buy and sell silver when the indicator reaches extreme readings.
The Summation Indicator is a weighted average of the silver to gold ratio, the RSI (14-week relative strength) of the silver to gold ratio, and the RSI of the silver price.
Rules:
Examine the graphs of silver prices and the “Summation Indicator” from 2002 to 2019. The indicator shows buys (green ovals) and sells (red ovals).
Central banks and governments can influence markets for long periods of time, but not forever. The media, Wall Street, central banks, and governments encourage many dangerous ideas. REMAIN SKEPTICAL when you hear that:
As Charles Hugh Smith (good article!) says,
“If vested interests are in charge, failure is guaranteed… The only possible output of this arrangement is collapse.”
In charge vested interests include Wall Street, Big Government, the Deep State, Big Pharma, Military-Industrial-Security Complex, Big Ag, and a legion of think-tanks and lobbyists. Because these powerful interests are in charge, expect ever-increasing debt, huge deficits, managed markets, devalued currencies, propaganda and higher silver prices.
CONCLUSIONS:
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