Consensus Trumps TA, Trumps Fundamentals

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I’ve read a lot of the “silver/gold will go down unless they go up”, type articles lately. It’s what people write when they don’t really know where we are in a cycle.

One signal and one signal only is giving a clear picture. Few investors use it, even fewer investors understand it. Basically most investors want to pay “analysts” to tell them what they want to hear. That’s why people believe you can lose money on a gold short position at the end of a gold bear market even if mathematics proves it impossible. “Don’t tell me it’s impossible, I want to feed my fantasies.” That’s why people mumble about gold being manipulated down as it climbs 660%. It’s their favorite fantasy.

I don’t know a lot of websites that actually make money for their readers. Ours does, we aren’t right on everything all of the time but I came into the bull market when it was brand new. Actually that’s why I started the website in the first place. I saw that it was a bull market and said so.

We have had a brutal correction in silver, gold and mining shares. According to consensus, it’s over.

We had a bottom on May 16 at a 3.91% premium to silver and it was shown accurately on the chart of the Sprott Physical Silver Trust at the bottom of the page. We just had a retest of the lows and had a slightly lower close of 2.39% premium of the trust to silver. That is the 2nd lowest value of the Trust since it’s inception. Only on November 8, 2010 did the premium go lower, showing 2.29% that day. November of 2010 was pretty meaningless because there wasn’t enough data.

My favorite chart until 2008 was of the XAU over Gold. It gave both clear buying signals and sell signals. It broke down in August of 2008 and was pretty worthless for tops but I think works perfectly for bottoms.

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