Post by jeffolie on Mar 15, 2012 14:46:49 GMT -6
Silver $100 or more? Timing is the issue
If the dollar declines significantly as other major currencies have done, then YES $100 or more ... timing is the issue because like a broken clock that shows the correct time twice a day, metals offer the correct alternative when a currency crashes.
my "jeffolie expectation" for the Dollar to significantly decline in 2014 and/or beyond may not seem valuable to you but more often than not my "jeffolie expectations" become true. Typically currency crashes take a year or more to reach their stability or end point.
Below the author looks for a silver peak and the approach comes from a doomer's point of view (see the end credit of his book "Ashes to Riches: How to Profit Spectacularly during the Economic Collapse of 2012 to 2022", published by Endeavour Press Ltd., and also available on Amazon.com. ).
" ... the next asset bubble in 2013 – 2014, at which point it could top $100 / oz. ..."
====================================
Is Silver the Great Trading Opportunity of 2012-2013?
New Update
By John F. Carlucci
March 15, 2012
Silver tends to form a very periodic, predictably shaped asset bubble. Silver is also relatively volatile compared to most assets like large cap stocks and gold. These two factors – predictability and volatility – offer a potentially very lucrative trading opportunity for silver. I believe that window is opening right now. In this article, we will examine silver's predictability and volatility in great detail so as to prepare for this trade. Figures 1 and 2 are a side by side comparison of the two most recent silver asset bubbles in 2007 - 2009 and the current unfinished cycle that began in 2010. advisorperspectives.com/dshort/guest/John-Carlucci-Silver-Trading-Opportunity-in-2012-2013-Update-120315.php
Figure 1: Silver - July 2007 to December 2009 advisorperspectives.com/dshort/guest/John-Carlucci-Silver-Trading-Opportunity-in-2012-2013-Update-120315.php
Figure 2: Silver - June 2010 to March 2012 advisorperspectives.com/dshort/guest/John-Carlucci-Silver-Trading-Opportunity-in-2012-2013-Update-120315.php
You'll notice corresponding points on both charts numbered 1 to 13. These tie in with the date and price tables below. Referring to Figure 1 advisorperspectives.com/dshort/guest/John-Carlucci-Silver-Trading-Opportunity-in-2012-2013-Update-120315.php : Silver - July 2007 to December 2009, these was a sloping increase from points 1 to 5 after the bubble first started to form. At point 5 the asset bubble burst dropping sharply down to point 6. The price fluctuated somewhat up to point 11. From there it dropped sharply again to point 12, recovered to 13, then on down to the bottom during late 2008.
Referring to Figure 2 advisorperspectives.com/dshort/guest/John-Carlucci-Silver-Trading-Opportunity-in-2012-2013-Update-120315.php : Silver - June 2010 to March 2012, notice how closely the points match those of Figure 1. The similarity is truly striking and while not identical twins you can plainly see that they belong to the same "family". The odds of this particular pattern repeating itself by random chance must be virtually nil. For our purposes, that pattern means predictability, which equals great profit potential for traders.
To get an appreciation of that profit potential refer to the data tables below advisorperspectives.com/dshort/guest/John-Carlucci-Silver-Trading-Opportunity-in-2012-2013-Update-120315.php . The left side of the tables is labeled SLV Silver 2007 – 2009, "SLV" being the symbol for the popular silver ETF. Referring to the table under SLV Silver 2007 – 2009 you see the words Date, Point, Price, Long, Short. "Date" is self-explanatory. "Point" refers back to the 1 – 13 points shown in Figures 1 and 2. "Price" is for one share of SLV corresponding to the date. "Long" and "short" trades are self-explanatory. Under the Long column is the percentage profit for various trades. The same percentage profit figures are listed in the Short column. Green indicates long trades, red indicates short trades.
Let's look at a specific example. You can see that on 17-Aug-07, the price of SLV was $11.66. That date was also point 1 on the Figure 1 chart. Assuming you bought SLV on that date for $11.66 and sold at point 2 on 9-Nov-07 for $15.29, you had a 31.11% profit. The entire trade from start to finish is highlighted in green since it was long.
Following down the table you see that the long trade from 14-Dec-07, point 3 to 14-Mar-08, point 5 had a 48.62% gain. Directly to the right of that you see the first short trade. It began 14-Mar-08, point 5, $20.42 and ended 21-Mar-08, point 6, $16.70. In this case, the profit was 22.28%.
This will give you an idea of how profitable an asset bubble can be and especially how lucrative trading silver has been recently. To save you the math of calculating compounding profits, if you had just traded long, bought $1000 of SLV at point 1 and sold at point 2 for a 31.11% profit, bought $1311 worth of SLV at point 3 and repeated the entire process to 20-Nov-09, your total compounded gain would be 548% over 2 ¼ years. If you include short trades the gain would have been 1,440%.
These are maximum potential gains, of course, under ideal circumstances with perfect trade timing. No investor will execute every trade perfectly for maximum gain. However, it does illustrate how much potential there is trading the silver asset bubble. You could have a very substantial profit by taking advantage of just half or one third of the potential.
Now consider SLV versus AGQ, the leveraged silver ETF. While SLV had a 71.57% gain from 20-Aug-10 to 31-Dec-10 (right side of first table advisorperspectives.com/dshort/guest/John-Carlucci-Silver-Trading-Opportunity-in-2012-2013-Update-120315.php ), AGQ had a gain of 258%.
What will the near future likely hold for silver? I anticipate that silver should rise over the next 12 months to the $40 level before pausing in advance of the next asset bubble in 2013 – 2014, at which point it could top $100 / oz.
There might be a steady rise from today's price up to $40. However, I think there could also be a near term drop to the $20 to $25 level before the rise to $40. It all depends on how the price of silver is influenced by the stock market and economy as a whole. A comparison of the charts for silver and the contemporaneous charts for the S&P do not indicate any type of direct correlation. The only tentative conclusion that might be drawn is that sharp declines in the S&P and silver will generally occur in close proximity. If we experience a sharp near term drop in the S&P expect silver to drop to $20 to $25 as traders liquidate to raise cash.
Keep a close eye on silver. It could provide an incredible trading opportunity over the next couple of years.
--------------------------------------------------------------------------------
Appendix: Tables advisorperspectives.com/dshort/guest/John-Carlucci-Silver-Trading-Opportunity-in-2012-2013-Update-120315.php
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(c) John F. Carlucci
John F. Carlucci is a regular contributor to Advisor Perspectives and the author of "Ashes to Riches: How to Profit Spectacularly during the Economic Collapse of 2012 to 2022", published by Endeavour Press Ltd., and also available on Amazon.com.
advisorperspectives.com/dshort/guest/John-Carlucci-Silver-Trading-Opportunity-in-2012-2013-Update-120315.php
If the dollar declines significantly as other major currencies have done, then YES $100 or more ... timing is the issue because like a broken clock that shows the correct time twice a day, metals offer the correct alternative when a currency crashes.
my "jeffolie expectation" for the Dollar to significantly decline in 2014 and/or beyond may not seem valuable to you but more often than not my "jeffolie expectations" become true. Typically currency crashes take a year or more to reach their stability or end point.
Below the author looks for a silver peak and the approach comes from a doomer's point of view (see the end credit of his book "Ashes to Riches: How to Profit Spectacularly during the Economic Collapse of 2012 to 2022", published by Endeavour Press Ltd., and also available on Amazon.com. ).
" ... the next asset bubble in 2013 – 2014, at which point it could top $100 / oz. ..."
====================================
Is Silver the Great Trading Opportunity of 2012-2013?
New Update
By John F. Carlucci
March 15, 2012
Silver tends to form a very periodic, predictably shaped asset bubble. Silver is also relatively volatile compared to most assets like large cap stocks and gold. These two factors – predictability and volatility – offer a potentially very lucrative trading opportunity for silver. I believe that window is opening right now. In this article, we will examine silver's predictability and volatility in great detail so as to prepare for this trade. Figures 1 and 2 are a side by side comparison of the two most recent silver asset bubbles in 2007 - 2009 and the current unfinished cycle that began in 2010. advisorperspectives.com/dshort/guest/John-Carlucci-Silver-Trading-Opportunity-in-2012-2013-Update-120315.php
Figure 1: Silver - July 2007 to December 2009 advisorperspectives.com/dshort/guest/John-Carlucci-Silver-Trading-Opportunity-in-2012-2013-Update-120315.php
Figure 2: Silver - June 2010 to March 2012 advisorperspectives.com/dshort/guest/John-Carlucci-Silver-Trading-Opportunity-in-2012-2013-Update-120315.php
You'll notice corresponding points on both charts numbered 1 to 13. These tie in with the date and price tables below. Referring to Figure 1 advisorperspectives.com/dshort/guest/John-Carlucci-Silver-Trading-Opportunity-in-2012-2013-Update-120315.php : Silver - July 2007 to December 2009, these was a sloping increase from points 1 to 5 after the bubble first started to form. At point 5 the asset bubble burst dropping sharply down to point 6. The price fluctuated somewhat up to point 11. From there it dropped sharply again to point 12, recovered to 13, then on down to the bottom during late 2008.
Referring to Figure 2 advisorperspectives.com/dshort/guest/John-Carlucci-Silver-Trading-Opportunity-in-2012-2013-Update-120315.php : Silver - June 2010 to March 2012, notice how closely the points match those of Figure 1. The similarity is truly striking and while not identical twins you can plainly see that they belong to the same "family". The odds of this particular pattern repeating itself by random chance must be virtually nil. For our purposes, that pattern means predictability, which equals great profit potential for traders.
To get an appreciation of that profit potential refer to the data tables below advisorperspectives.com/dshort/guest/John-Carlucci-Silver-Trading-Opportunity-in-2012-2013-Update-120315.php . The left side of the tables is labeled SLV Silver 2007 – 2009, "SLV" being the symbol for the popular silver ETF. Referring to the table under SLV Silver 2007 – 2009 you see the words Date, Point, Price, Long, Short. "Date" is self-explanatory. "Point" refers back to the 1 – 13 points shown in Figures 1 and 2. "Price" is for one share of SLV corresponding to the date. "Long" and "short" trades are self-explanatory. Under the Long column is the percentage profit for various trades. The same percentage profit figures are listed in the Short column. Green indicates long trades, red indicates short trades.
Let's look at a specific example. You can see that on 17-Aug-07, the price of SLV was $11.66. That date was also point 1 on the Figure 1 chart. Assuming you bought SLV on that date for $11.66 and sold at point 2 on 9-Nov-07 for $15.29, you had a 31.11% profit. The entire trade from start to finish is highlighted in green since it was long.
Following down the table you see that the long trade from 14-Dec-07, point 3 to 14-Mar-08, point 5 had a 48.62% gain. Directly to the right of that you see the first short trade. It began 14-Mar-08, point 5, $20.42 and ended 21-Mar-08, point 6, $16.70. In this case, the profit was 22.28%.
This will give you an idea of how profitable an asset bubble can be and especially how lucrative trading silver has been recently. To save you the math of calculating compounding profits, if you had just traded long, bought $1000 of SLV at point 1 and sold at point 2 for a 31.11% profit, bought $1311 worth of SLV at point 3 and repeated the entire process to 20-Nov-09, your total compounded gain would be 548% over 2 ¼ years. If you include short trades the gain would have been 1,440%.
These are maximum potential gains, of course, under ideal circumstances with perfect trade timing. No investor will execute every trade perfectly for maximum gain. However, it does illustrate how much potential there is trading the silver asset bubble. You could have a very substantial profit by taking advantage of just half or one third of the potential.
Now consider SLV versus AGQ, the leveraged silver ETF. While SLV had a 71.57% gain from 20-Aug-10 to 31-Dec-10 (right side of first table advisorperspectives.com/dshort/guest/John-Carlucci-Silver-Trading-Opportunity-in-2012-2013-Update-120315.php ), AGQ had a gain of 258%.
What will the near future likely hold for silver? I anticipate that silver should rise over the next 12 months to the $40 level before pausing in advance of the next asset bubble in 2013 – 2014, at which point it could top $100 / oz.
There might be a steady rise from today's price up to $40. However, I think there could also be a near term drop to the $20 to $25 level before the rise to $40. It all depends on how the price of silver is influenced by the stock market and economy as a whole. A comparison of the charts for silver and the contemporaneous charts for the S&P do not indicate any type of direct correlation. The only tentative conclusion that might be drawn is that sharp declines in the S&P and silver will generally occur in close proximity. If we experience a sharp near term drop in the S&P expect silver to drop to $20 to $25 as traders liquidate to raise cash.
Keep a close eye on silver. It could provide an incredible trading opportunity over the next couple of years.
--------------------------------------------------------------------------------
Appendix: Tables advisorperspectives.com/dshort/guest/John-Carlucci-Silver-Trading-Opportunity-in-2012-2013-Update-120315.php
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(c) John F. Carlucci
John F. Carlucci is a regular contributor to Advisor Perspectives and the author of "Ashes to Riches: How to Profit Spectacularly during the Economic Collapse of 2012 to 2022", published by Endeavour Press Ltd., and also available on Amazon.com.
advisorperspectives.com/dshort/guest/John-Carlucci-Silver-Trading-Opportunity-in-2012-2013-Update-120315.php