Why I'm calling $18 Silver

[Rodebaugh]

First off, Let us get the disclaimer out of the way. The following is an opinion. Do not interpret the following as investment advice. It is always wise to do your own research and act upon what you think is best to help meet your investing goals. Below is to be used purely for entertainment purposes only.

There are two Main points upon which I base my valuation and price target of $18; emotion and money. This is the Emotion of how folks are acting and what people are saying. We’re not talking about the people you and I. We’re talking about investors and investor media. The same goes for money. Our money amounts to squat. We need to look bigger; think QE and interest rates. Plot these two variables and add in main events on a convenient multiyear chart that tracks spot versus time and view the results. In short I believe that $18 was the new normal/sub-breakout point. Thats where silver went parabolic. Forget supply and demand. They mean nothing in a highly leveraged market whereas 98% of contracts do not get exercized.

[CtrlAltBernanke]

If it's going to hit the teens, and I believe it will, it will go below $18.

[blackrabbit]

Thanks for the info. I wonder if I should panic sell everything now? Nah, I still like my shiny.

[johnbrickner]

Thanx Doc, I appreciate your opinion. And it looks like the base of support on the chart.

[neilgin1]

just a brief scan of that first chart...says everything....$18 then, with a 3to 7 dollar premium....what about 90's?......16-18 times cash?

[Engineer]

just a brief scan of that first chart...says everything....$18 then, with a 3to 7 dollar premium....what about 90's?......16-18 times cash?

I've been watching the APMEX buy premiums/spreads on 90%, and they're currently $2.50 over spot with a 6.4% buy/sell spread. If we hypothesized that the buy premiums would go to $4 over spot at $18, that would be roughly 15.7x buy and 16.7x sell.

If the premium stayed constant, it would be approximately 14.6x buy and 15.6x sell.

[68Camaro]

If we forget supply and demand then I'm not sure we're talking about a real price of a real commodity. If we're not talking about something that is real, then why is $18 the base? Why not $9? Or any other number. At some point I stop caring because paper and physical will have disconnected.

[IdahoCopper]

My prediction is today, right about the 08:00 mark on the Kitco chart, something will happen. The sideways trend for the last 20 hours will end.

[reddirtcoins]

So I'm not crazy....

[Country]

Logical and well thought out. Since my major stacking is in the past, I have a bias to hope that you are wrong. The snapback at $20.23 will be tested, and $21 is the last line in the sand before the entire rise from $15-$18 is completely wiped out. My greatest fear is that PMs will go down and stay down for a long, long time; losing their appeal as a store of value as time marches on.

It's gut check time - and each of us will find out in the coming months whether we can take the heat...

[SoFa]

It's refreshing to see analysis without any word of manipulation, banksters, and all that other mumbo jumbo that the bullion peddlers use.

[68Camaro]

It will be interesting to revisit this in 1-3 years with then perfect hindsight.

[IdahoCopper]

My prediction is today, right about the 08:00 mark on the Kitco chart, something will happen. The sideways trend for the last 20 hours will end.

So much for my ability to predict the PoS.

[InfleXion]

If we forget supply and demand then I'm not sure we're talking about a real price of a real commodity. If we're not talking about something that is real, then why is $18 the base? Why not $9? Or any other number. At some point I stop caring because paper and physical will have disconnected.

This is where I am at too. I do believe that paper is eventually going to zero, and we have seen in times like these and in 2008 that the paper price doesn't matter so much to the physical market at least until somebody is willing to supply it at the new price and let it trickle down.

I also am on board with Rodebaugh's analysis that $18 seems like a plausible bottom point as there is more support there on the graph than my trend target of $21, but as we know the paper price can do anything. If we do see $18 I doubt the physical metal will get a whole lot cheaper than it is now. I have been a buyer at almost every price point over the last 5 years because I believe regardless of how low we go this round that the next round will be new highs, and even if that's not the case I'd rather secure my position in the present than put it out into the future with unknown circumstances, because my primary goal isn't profit as much as the protection that tangible assets provide.

[shinnosuke]

Hear, hear. Of course there is always the possiblity that this forum has become the perfect little echo chamber for its membership, but using that thing that rhymes called history, I believe our motives and forecasts are right on target.

If everything I have been reading about demand for precious metals, particularly in Asia, is correct, I wonder what would happen if another 1% of all Americans suddenly decided to start protecting their wealth via PMs.

[johnbrickner]

Hear, hear. Of course there is always the possiblity that this forum has become the perfect little echo chamber for its membership,

Why all views, opinions, and insights need to be respected, even if they do not echo the majority of our membership. You don't have to like them, or even agree with them. But, the day we all agree with each other, we are no longer aware.

[Market Harmony]

This is how I determine where price is going to go... His name is Chris:

[Rodebaugh]

Mike has a good method.

[Lemon Thrower]

i'm not making any calls, making a call anchors you to a particular price mentally.

but i do think it is possible we will go lower. in the 70s, gold retraced about 50% and did so very swiftly.

if you look at this on a percentage basis, the retrace in silver has already been more extreme than gold, so i think gold is a bit more vulnerable.

[slickeast]

I predict that in the near future we will see prices move up and down and sometimes sideways. Now here is where it gets interesting. The long term prices are predicted to do the same.

[Rodebaugh]

[Jonflyfish]

Excellent!

Cheers!

[slickeast]

Wowzeers

[shinnosuke]

Figures. I just bought some yesterday. I like this new pricing even more. Get some before the Indians & Cowboys, I mean, Chinese buy it all.

[blackrabbit]

So is this the bottom? It sure seems like it can fall more. What do the tea stained teeth say?