Gold/Silver: Greed, Fear and the Human Ego…

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  1. When any market makes a big move, tremendous interest in that market appears. After greed and fear, the next most financially damaging emotion in the market is likely the human ego.

  2. A number of major markets have made big or threatened to make big moves recently. The winds of change appear to be in the air with interest rates. Often there is what appears to be an initial “sea change” event. Unfortunately, most of the market action that follows a sea change move is not very predictable.
  3. The most successful investors operate from a state of what I term, “mild confusion”. When you are not really sure of the next move, your ego, greed, and fear are controlled. When you feel very sure you have the next move figured out, you are open to making such major capital allocation errors.
  4. I want to see you handle the next moves in gold and silver professionally, whatever they may be. My long term target for silver is $100-200, but the ultimate price is going to be dictated by silver’s big brother, gold.
  5. The solution to this crisis is gold, not silver. Silver is along for the ride, and may even outperform gold, but silver is not even a bit player, in terms of solving the crisis.
  6. Click here now to view the monthly silver chart. There’s no question that the silver monthly chart looks almost frightening. From a liquidity flows standpoint, the banksters have frightened hedge funds and speculators with a series of margin hikes. Investors wonder if the same thing awaits them again, if there is a price rally.
  7. I’ll get to the shorter term charts in a minute, but I want you to understand that this monthly chart is overbought in many ways, flashing many sell signals, and has no big support before the $20-23 area.
  8. The bottom line is that while I’m a buyer into this weakness, I have no illusions that I’m buying for a bounce, or making a turn call. I’m buying an item that has declined by about 35% in price. Price could blast through $50 and take all the technicals back into the overbought zone, but price could also consolidate here, or even continue to fall hard against the dollar.
  9. You can’t know what the next directional move is; all you know is that the item is 35% on sale in a long term bull market, during the greatest crisis of the dollar in history. Is that reason enough to buy some silver? Obviously it is.
  10. As a professional, you don’t guess. You prepare and respond. For the bullish side of things, click here now to view one of the most bullish liquidity flows reports since the silver bull market began.
  11. Since that report, price has taken another turn lower, so it is very possible that the liquidity flows are even more bullish now! Notice that the bankster (commercials) holdings have grown to 49,000 long contracts. The funds are down to only 35,000 contracts.
  12. Do the short term charts back up this bullish liquidity flows action? Click here now to view the daily silver chart. On the negative side of things, I want you to notice the green histograms (pipes) on the 12,26,9 series of MACD that I highlighted.

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