What if the Silver High isn't a Price or Ratio, but a Timeframe?
Time is money, and money is time. Over the past decade we've all read countless articles with headlines like "$10,000 Gold" and "$1,000 Silver"...
submitted by Matt Orloff
Time is money, and money is time. Over the past decade we've all watched and read countless articles with headlines like "$10,000 Gold" and $1,000 Silver", Why $700 Silver is Possible, and "The Curious Case for $936 Silver.
I consider myself a technical fundamentalist. Which means I primarily value something on its fundamentals, but begrudgingly submit to the technical parts of trading.
Here are some of the facts to why most of us own Silver.
1 - Silver went to $50 both in 1980 and 2011 yet has been around 1/3 of that until just recently.
2 - Inflation Adjust 1980/2011 and you get about $150 and $60 now.
3 - Silver comes out of the ground now at about 1/8 with Gold but is priced at about 1/80 with Gold.
4 - Silver is mostly used up which further exacerbates those ratios.
5 - The last two times Gold went up Silver outperformed it by around 3X.
So we all know silver will go up and will go up enormously, but the Million Dollar Question is, what price DO we sell?
Then there are our price indicators.
$50 ?- $60 ? - $150?
Our Gold Ratio Indicators
Cost of Production Ratio - 65/1?
2011 Ratio - 31/1?
Geologic Ratio 17/1?
Pre 1873 Ratio 16/1?
1980 Ratio 14/1?
Mining Ratio 8/1?
Ancient Sun Tzu Chinese Ratio 5/1?
Above Ground Ratio 2/1?
Chris Duane and Bix Weir - 1/1?
The problem with all of these is that there are so many guesses and all of them have some logic to them.
But what about another way of looking at it of instead of a Price, or Even a Ratio, but rather a TIMEFRAME?
After poring over the 1980 and 2011 charts looking for something to give us a more accurate advantage, I noticed some striking similarities.
1 - There was a minibull market first.
2 - There was a significant crash of 30% or more.
3 - The crash then slingshotted the price to 2X the crash price.
4 - From the 2X Crash Low, the price THEN went exponential.
5 - MOST IMPORTANT. The Exponential Phase lasted nearly the same amount of time before peaking.
6 - There was then a crash, and a bear trap and then going into a long term bear market.
Looking back in time I found the closing prices for the specific days and did a calendar day count for 1980 and 2011. What I found made me pretty excited. Those two timeframes between the 2X and the Top were 246 days and 261 days. Below is the data.
To put this into perspective of how useful this COULD be as an indicator imagine if in 1980 and 2011 the ratios instead of being 1/14 and 1/31 they were 1/14 and 1/15. This is the equivalent of a 7% difference rather than over 100%. The accuracy of that indicator is much more useful as its within a tight range and you might be apt to sell off at 1/16 knowing you're close to the all time limit.
So to reiterate, in 1980 and 2011 the Silver Price had a minibull market first, crashed more than 30% then after a slow rise and after reaching and consolidating 2X from its crash low it reached its peak 246 days & 261 days after (Just over 8 months). For our current situation, we have had our minibull in September of 2019 where it rose to $19.57 and its crash low when it went to $12.12. Then just recently on August 3, it reached $24.25 before continuing parabolically. If the patterns of the 1980 and 2011 markets continue into the 2020 bull run then we would theoretically see our top around April 6 to April 21. We have already gotten 4/6 indicators of the previous two bull markets and are in our parabolic phase.
This is not financial advice, but it is financial INFORMATION to add to your exit strategy.
Ok, though, you want some AG dopamine?
If we go for 8 more months at the rate we've been going for the past 3 weeks adding $3/week that would put us at a price of around $100. However, the price should increase at a faster pace later on we go so good chance it may be closer to $200.
Good luck Stackers.
Matt Orloff