Comments on: Gold:Silver ratio approaches support

By: Adam

Adam — Fri, 18 Sep 2009 03:15:28 +0000

Right on SovSpec. I’m with you entirely and I’m heavily invested in physical Gold (this is a long term holding not to be traded until the Dow to Gold ratio reaches 2 or less)! Things just seem too much in synch and are falling in line with Prechter’s “dollar vs. everything else” inverse correlation. I think the rise in the U.S Dollar will be stunning. The 3rd wave down in stocks probably won’t take very long but the 4th wave may well take forever (a la Japan).

Cheers!

By: Mike

Mike — Thu, 17 Sep 2009 20:40:38 +0000

Hi Bjorn. I think Prechter has been saying 2012 to 2016 lately. I’m not one to second guess him when it comes to such things, and it is certainly possible that this turns into a Japanese-type affair, albeit not quite as drawn out. 3 of 3 is supposed to be fast, but we could limp along in 4 of 3, and waves 4 and 5 of wave C for a long time.

Real or gold values might continue to decline beyond the nominal bottom, also. I really don’t have a good sense of how this will play out, and I bet Prechter would admit the same. We’re both just convinced that the lows are years away and 60% or more beneath us.

By: Bjorn

Bjorn — Thu, 17 Sep 2009 20:18:40 +0000

Hi Mike,

Robert Prechter recently wrote that the market might not hit bottom for another “five to eight years.” I’m trying to wrap my mind around that time line. If wave 3 down is supposed to be fast and furious, doesn’t that leave just waves 4 and 5 to go to hit bottom? Wave 1 down lasted about eighteen months; the rally of wave 2 might last 7 months or so, if forecasts are right. Does it make sense to you that the decline could drag on for another 5 to 8 years?

Thanks

By: Pej

Pej — Thu, 17 Sep 2009 13:18:45 +0000

OK, thanks for the advice. I’ll work on add a stop loss as soon ASAP (probably later today before close)

By: Mike

Mike — Thu, 17 Sep 2009 13:07:08 +0000

Always is. The general practice is, after the first solid move in your direction, move the stop from tolerable loss to breakeven. As the market keeps going your way, after each sizable move tighten the stop to just beyond major resistance levels.

By: Pej

Pej — Thu, 17 Sep 2009 12:54:37 +0000

Yes, it required a lot of effort to bypass my fear when silver got below 10 and I was very fearful when placing those the orders. And unfortunately, I didn’t buy enough at those levels (for obvious reasons…). That’s why I added more in the 10,11,12 range.
But i’d like to avoid getting out too early and Silver being so volatile, it’s a very tough call about where to put that trailing stop loss…

By: Mike

Mike — Thu, 17 Sep 2009 12:17:06 +0000

Sure, it could spike another buck or so here. Nice job on going long — I’d think about putting on a stop-loss or trailing stop if you think silver still has steam left, because when the run is over it could drop very fast.

By: Pej

Pej — Thu, 17 Sep 2009 11:39:45 +0000

Hi Mike,
Indeed, i have been loading up on SLV since it was below 9 and kept on buying up to about 13. But it’s been rising exponentially in the past several weeks.
But don’t you think that as usual, it might overshoot before getting back to more normal levels (in terms of historical averages)