Posts tagged ‘silver’

Metals Rieki & Jiseki updated

XAU PHLX gold silver Index Rieki has turned negative from near 100 levels. XAG (Silver) is also negative. The Silver (ISHR SILVER TR) is also at an extreme ranking (the best performer) among our global coverage. Base metals Zinc and Aluminum have non confirming Rieki performance cycles. Overall the metals complex remains topping for us. Palladium is the best reduce (Sell) while Zinc and Aluminum are the worst ranking metals (the holds). From a strategy point of view, short Palladium and Tin, long Aluminum and Zinc should work.

Naked and/or pair strategies are not riskless strategies. Time arbitrage portfolio legs should be risk weighted before any implementation. Please mail us for a detailed working or consult a local financial risk manager to execute these pairs. For more details please subscribe to the Orpheus Research.



Metals Rieki & Jiseki updated

XAU PHLX gold silver Index Rieki has turned negative from near 100 levels. XAG (Silver) is also negative. The Silver (ISHR SILVER TR) is also at an extreme ranking (the best performer) among our global coverage. Base metals Zinc and Aluminum have non confirming Rieki performance cycles. Overall the metals complex remains topping for us. Palladium is the best reduce (Sell) while Zinc and Aluminum are the worst ranking metals (the holds). From a strategy point of view, short Palladium and Tin, long Aluminum and Zinc should work.

Naked and/or pair strategies are not riskless strategies. Time arbitrage portfolio legs should be risk weighted before any implementation. Please mail us for a detailed working or consult a local financial risk manager to execute these pairs. For more details please subscribe to the Orpheus Research.



Silver gets ready to complete final leg, after which it should fall 25%

Unlike Gold, Silver seems to be completing a final v subminor up. This seems to be a completion of the leg up from Nov 2009. And considering the large exponential blow off that we illustrated prior and Silver topping the Jiseki rankings we continue to look at any leg up on Silver now as the last leg after which the white metal should fall back into 22.40 previous iv wave supports. Gold also seem to be in the final Y minor leg up and should follow silver down.

TICKS.GLOBAL covers DOW, GOLD, SILVER, OIL, EURUSD, DAX and other global assets and futures on an Intra day basis. The reports are published through a self refreshing webpage. TICKS.GLOBAL is a web based service it is only available through the Orpheus Site.


TICKS.GLOBAL - Silver blowoff

Silver Spot. Primary multiyear price formation suggests a blow off. This is extreme euphoria which should see a large reaction lower. We don’t have a reversal signal yet. A negative weekly close from current levels will be our first sign for at least a multiweek reversal in silver.

TICKS.GLOBAL covers DOW, GOLD, SILVER, OIL, EURUSD, DAX and other global assets and futures on an Intra day basis. The reports are published through a self refreshing webpage. TICKS.GLOBAL is a web based service it is only available through the Orpheus Site.


ALPHA.GLOBAL - SILVER UP 17% SINCE 31 AUG

ALPHA is a pair trading, long only and short only strategy product based on TIME fractals. Time arbitrage, Time Triads, Time fractals are terms coined by Orpheus Research. The signals are carried over three different time frames viz. sub minor (2-3 days), minor (10-30 days) and intermediate (above 30 days). This is a daily signal product. The signals will be illustrated through tracker and running portfolios. Alpha can be used by fund managers for relative allocations, traders for leverage bets and high net worth clients for selective trades. This is a part of the time triads analytics developed by Orpheus Research.

LONG ONLY, SHORT ONLY portfolio covers DOW, S&P500, SENSEX (INDIA), GOLD, SILVER, EURO DOLLAR, YEN DOLLAR, 10 YEAR US TREASURY BONDS, 10 YEAR GERMAN BUND.

STOP LOSS AND EXITS are activated at 2%

Please feel free to mail us for any clarifications. *This is a strategy product. Long Short strategies are not riskless strategies. Please mail us for a detailed working or consult a local financial risk manager to execute these pairs. For more details please subscribe to the ORPHEUS TIME ANALYTICS research products.

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SILVER. ANTICIPATED AND HAPPENED

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WAVES.GOLD is a perspective product published on Tuesday and Thursday. The report highlights GOLD and other precious and base metals. The product highlights Primary (Multi Month) and Intermediate (Multi Week) price trends. The report illustrates key price levels, price targets, price projections and time turn windows. The product uses Elliott waves, traditional technical analysis tools, sentiment indicators and other alternative research tools like INTERMARKET to spot outperformers.

REUTERS RICS: XAU=, XAG=, XPT=, CU-NYC, .SPGSIZ, SPGSIA,.NSTL


Long silver, short gold and…

…the DOW bottom. If markets could not have got more complex for GOLD BULLS, our intermarket cycles desk has initiated a LONG SILVER, SHORT GOLD signal. Though the signal was cooking for sometime since we gave our SILVER TURNS UP update (WAVES.GOLD.311008), we were waiting for more confirmation regarding a turn up on the silver performance cycle against Gold.

An Intermarket CYCLE signal is a lot different than a normal price or momentum signal. Here we are looking at performance time cycles. Silver and Gold have a performance cyclicality against each other. After a fixed period one asset from the pair outperforms the other. Silver shows a 5.5 average cyclicality against Gold. The last time Silver hit a performance low against Gold was in Mar 2003. Though the illustrated chart is of a larger time frame, the DAILY and MINOR charts have already given a turn signal. Month over Month, high to low, Gold fell 15% and 6% in Nov and now in Dec respectively. While Silver fell 18% and 7% for the same period. The relative trend should change in favor of Silver. The white metal should rise more than Gold or fall less then the yellow metal.

It was on 13 Nov 2006, we published ‘The Gold Silver’ ratio when we said “The price relationship between Gold and Silver is not fixed? It varies substantially. And it has predictive value too…. “ Then in 21 April 2008 we said “The Gold-Silver ratio, we highlighted last time (The Metals Maze) gave no signal of a collapse. Rather the sentiment indicator has moved unfazed despite millions going homeless and more than 100,000 losing their financial jobs (more serious than the tech bust). This means two things, one that the Gold-Silver ratio has stopped working after predicting the 1980s and 2000s crash or second the crisis has not yet started. “

What happened after MAY 2008 was much worse than what crisis we saw till then. The DOW collapsed 42% since MAY 2008. This collapse was accompanied by the rise in the Gold –Silver ratio (Fall in the Silver – Gold). Though we were inappropriately connecting fall in Gold prices as cause for delayed recession, the intermarket cycle between Gold and Silver was working perfectly. The ratio line started moving up perfectly before the big crash. Now on most performance measures the relationship between the two metals is stretched and at an extreme. And if our other inter market pairs like S&P 500 vs. Dow and BSE 500 vs. Sensex have some merit, the Long Silver – Short Gold should be accompanied by a rise in the equity market worldwide including the DOW. We have carried the DOW along with the silver vs. gold cycle oscillator in the report. The oscillator low timed most of the DOW primary and intermediate lows since 1980 (last four occasions). We are betting on a low again. Meanwhile Gold and Silver continue to move as anticipated. Though both the metals seem to be in an ongoing corrective formation, we are still expecting SILVER to continue to hold above previous lows.

Enjoy the latest WAVES.GOLD

Enjoy the latest [a href="http://www.or-phe-us.com/orpheus/page.php?tabid=7&categ_id=323"]WAVES.GOLD[/a]

WAVES.GOLD is a perspective product published on Monday and Wednesday. The report highlights GOLD and other precious and base metals. The product highlights Primary (Multi Month) and Intermediate (Multi Week) price trends. The report illustrates key price levels, price targets, price projections and time turn windows. The product uses Elliott waves, traditional technical analysis tools, sentiment indicators and other alternative research tools like INTERMARKET to spot outperformers.

REUTERS RICS: XAU=, XAG=, XPT=, CU-NYC, .SPGSIZ, SPGSIA, .NSTL

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SILVER turns up

Apart from the KEY REVERSAL bar (RIGHT), we have historical momentum lows both on daily and weekly time frame and conventional multi year supports on SILVER. Last week we mentioned the GOLD-SILVER ratio, which also suggests outperformance on SILVER. The ratio continues to suggest the turn up for SILVER.

This week we look at GOLD a bit closely. The move down seems incomplete. And now that prices have retested and breached the psychological 700, a further move down can not be ruled out. Sub 780, GOLD could be in for sub 600 levels. This might look strange, but this is what we see now. Above 780 we review. We have carried many other anticipated and happened cases on the rest of the metals complex. There is a special intermarket case on PLATINUM, which has historically outperformed both GOLD and SILVER. According to intermarket cycles, Platinum should lead Silver. The overall view on the broad metals complex continues to suggest that METALS are indeed completing the CYCLE II wave down. This is one CYCLE II low metal bulls may not like to miss.

Enjoy the latest WAVES.GOLD.311008

WAVES.GOLD is a perspective product published on Monday and Wednesday. The report highlights GOLD and other precious and base metals. The product highlights Primary (Multi Month) and Intermediate (Multi Week) price trends. The report illustrates key price levels, price targets, price projections and time turn windows. The product uses Elliott waves, traditional technical analysis tools, sentiment indicators and other alternative research tools like INTERMARKET to spot outperformers.

REUTERS RICS: XAU=, XAG=, XPT=, CU-NYC, .SPGSIZ, SPGSIA, .NSTL

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THE METALS MAZE

Intermarket relationships between metals can not only give cues about the economic cycle but also lead the start of a global equity bear market.


The last time we discussed Gold in Dec 07, it was at dollar 800. Starting 2008 it completed it’s leg up to 1000 and is now ruling at 930. While Gold (Fig 1.) and Silver (Fig 10.) might be hanging in there tight, metals as a group are scattered on the price performance scale.

For example few would like to talk about Zinc, which has crashed 50% since the time we wrote about negativity on Zinc (Jan 2007 – India Outlook). It was then we saw that the metal had turned and Hindustan Zinc (Fig 3.) could fall despite a positive Sensex. The love has turned into hate. And all the merger talks between Zinifex and Umicore could not prevent Zinifex from crashing 61% from merger highs. Euphoria about mergers, despite a 33% success rate (since 1985) is unsustainable.

Even Uranium (Fig 4.) fell 50% from its peak. There are of course many reasons why metals or markets fall or why things happen. But most reasons, like news always are late and cannot time a market. The reasons which worked for Zinc were linked to fractals of mass psychology and intermarket analysis.

We made the case between equity (example Hindustan Zinc) and its underlying metal (Zinc - Fig 2.) and how one could tell us about the other. Today we go a step further and look at the relationships between metals itself. We extend the inter market  dynamics to  various metals like Gold, Silver, Zinc, Copper and Uranium.

Silver has never outperformed Gold since 1985. And Gold-Silver (Fig 6.) sentiment indicator, which we have mentioned on prior occasions continues to be leading market indicator for equity bear markets.

The last two periods when Gold outperformed Silver was in 1987-1991 and 1999 -2003 (Fig 6.) . Both these periods were the only time we witnessed the last two global bear markets. Gold has not started outperforming silver yet and is still at parity of about 25 years.

So there is no negative signal here. This means that all references to great depression and pictures of pensive Ben Bernanke on the Newsweek cover alluding to a global crisis and failure of American Leadership might all be premature. According to metals, this was no big collapse. We need another few months to see what works, the news and emotional chaos or the Gold - Silver ratio.

Then comes Copper-Silver (Fig 5.) ratio. Copper is outperforming Silver from Jan 2002. Why should Copper outperform Silver? Copper is more about discretionary consumption and Silver is precious and limited in its industrial usage.

This is probably the reason why Copper leads Silver consumption at the start of a business cycle. The ratio made a low few months ahead of the equity bear market low worldwide in 2002.

The ratio has stagnated over the last two years but is still above parity. Copper prices also are in a large consolidation and seem to have a primary (more than 9 months) upside left. This means more outperformance for copper compared to Silver. This too does not give us bearish cue for equity markets now.

Coming to Uranium, this strategic metal has also outperformed Gold. Compared to the geopolitical crisis and the dollar crisis that is crippling the world economy, it’s the energy crisis which Uranium suggests is more serious.

This metal leadership starting Feb 2005 happened exactly at the time when Oil (Fig. 7) broke above the dollar 40 barrier broke. We have also illustrated the Uranium – Oil (Fig 9.) intermarket ratio. The outperformance of Uranium compared to Oil also suggested that Oil was set to rise much above dollar 40. Strange reason some might say, a metal telling us more about global economy than the best economists in the world.

This list of intermarket dynamics between metals can be stretched to Uranium vs. Copper. Copper is linked to mid economic expansion cycle, while Uranium owing to its energy connection comes in the late expansion economic cycle. Uranium started outperforming Copper in (late) 2005 and is still above parity suggesting that we are nearing towards the turn in the economic cycle. Here also we have no signal which tells us, that we have indeed turned.

Zinc has come a full circle compared to Gold (Zinc vs. Gold – Fig 8.) . It outperformed Gold from Sep 2005 and now starting this year started underperforming Gold. Why?

Zinc is linked with auto and auto is in a rut. The commodity drop might be owing to this auto connection. Zinc is also ancillary to the metal industry. A drawdown in metal prices might also have some added influence.

From a fractal perspective, both Gold and Silver are completing their primary fifth circle legs with a final pending leg up. Final leg ups are tricky and can be truncated. So we will not be micro timing it. After these respective final legs, both precious metals should see a sizeable retracement.

Locally (India)INR 12,000 levels are decisive for MCX Gold Jun. A push down here confirms further negativity here. MCX Silver Jun key levels lie at INR 24,000. And we have not much positive confirmation here too.
In conclusion, we are indeed at key junctures for Gold and Silver and global markets. But in any case, it’s not the metals that are insane, but we the humans.

In his book, The power of Gold, Peter Bernstein starts with a story of a man on a voyage with his entire wealth in a large bag of gold coins. A terrible storm and a call to abandon the ship prompted the man to jump overboard strapped to his bag of gold. He promptly sank to the bottom of the sea. And so the narrator asks, “Now, as he was sinking, had he the gold? Or had the gold him?“


THE PROSPERITY INDEX

Daniel Kahneman, Father of behavioral finance has clearly illustrated in his life long and Nobel Prize winning work that a majority of us humans are loss averse. Even if it means making a wrong choice. If we plug his work on the Elliott fractal then we can assume that all down ending C waves will have very few people digging into stock fishing. There will be more panic, as extreme negativity involving mass psychology would mean “stay away”. Capital conservation is not a strategy for a top, it’s always been an investment strategy for the bottom. This is why Humphrey Neil said, masses generally go wrong on a turn. But as technicians, we understand that timing is the name of the game.

The prosperity index espouses the same principle of wrong choices at an extreme. We highlighted the prosperity index on 13 Nov 06 in our WAVES.METALS report. Also known as the Gold-Silver ratio, the ratio lows come near prosperity highs. As illustrated, we as a society are heading into the most prosper times of the last 25 years. And conventional wisdom and conventional research foresees prosperity as a straight line, which means the bounty and loot shoot continue. But unfortunately, life and everything in nature, like stock market is cyclical. After high prosperity it’s time for the swing to the other extreme. The ratio is near 1 and has always returned back from these levels for a quarter century. Whether the Index will turn again remains to be seen.

On the short term, the anticipated triangle resistances ahead for Gold, Silver, MCX – Gold Near, HUI – Gold Bugs, NEM Newmont Mining Corp, GFI Gold Fields Limited and XAU – Gold and Silver Index are still running at 640, 13.2, 9300, 340, 47.4, 18 and 144 respectively came in visibly and clearly. A break for Gold here will push us to our alternate interpretation of a Gold flat up to 690 and maybe to a new high with a first target to psychological 700. If prices move above 690, we will get two signals. One it’s time for Gold (tangible asset) to move to 1000 and second that the prosperity Index has turned from an extreme and it’s time to conserve capital in the paper assets (non tangible) that you might be holding.


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