Bull Market for Silver and Gold Now in Full Resumption

Since I sent this update to subscribers on Sunday, September 2nd, silver is up as high as 5.6% intraday; likewise, Pan American Silver Corp. (PAAS) is up 6.5%, Silver Standard Resources (SSRI) is up 19% and gold is up 5.4%. Is the bull market for silver and gold now in full resumption? We think so and will invest accordingly.

Here are the numbers for this week since August 26th.

London Silver Fix Price: $11.95 (+$0.25 on week)

NYMEX Spot Price: $12.02 (+$0.09)

US Dollar Index: 80.75 (+0.08)

Silver RSI: 45.86 (+4.64) (70 overbought/30 oversold)

US Dollar RSI: 45.14 (+2.20) (70 overbought/30 oversold)

RMAR: 0.89 (unchanged) (1.30 overbought)

NYMEX SLI: 1.31 (+0.01) (1.80 overbought)

GSR: 56.23 (-0.25) (15.00 silver overbought)

SLD: 2.04 (+0.04)

GLD: 1.52 (+0.01)

200 and 50 day exponential moving average difference: -$0.25 (-$0.11)

KEYWORDS:

RSI: Relative Strength Index

RMAR: Relative 200 day Moving Average (Refined)

SLI: Silver Leverage Indicator

GSR: Gold to Silver Ratio

SLD: Silver Leverage to US Dollar on a four year rolling basis

GLD: Gold Leverage to US Dollar on a four year rolling basis

My feeling is that the silver correction since May 2006 is almost over if not finished as of the 16th August. Three things make me think this.

1. The 50 day moving average continues to move under the 200 day moving average with a further drop to 25 cents below. Once the 50 day goes back over the 200 day, I would consider that one condition for a renewed bull move.

2. We had a gap up day on silver on Friday. These form when the price opens above the high of the previous day. These are rare and when you look at the accompanying chart, they have been bullish for silver with $3 and $1 moves respectively. Though this is not a sole signal of a finished correction, it should not be ignored!

3. We have also completed an expanding triangle formation on silver which I have also added to the chart. This looks very bullish to me because the completion of the "E" wave normally presages a big move in the opposite direction which has been doubly reinforced by the gap up. I looked up my Elliott books to find out when expanding triangles are most common. The answer was that they are most common at the end of ABC and WXY corrections in the C or Y waves. In other words, we could be looking at the end of this 18 month correction.

Now this does not mean silver will start ramping up a dollar a day, but the downside risk to me is minimal!

click to enlarge

Comments

[EE:]

You are the third Alpha contributor I'm bringing Theodore Butler reports to that should also explain why silver has seen the lows. Go to his archives and read the last 4 reports. Aside from Butler,are you hearing from other contacts that validate the silver manipulation and building short squeese explosion the charts seem to show? Will anyone provide an opinion on Butlers work or help expose the story? Why aren't resource investor proponents all over the exchanges,regulators,&... dealers trying for crimminal charges?

2007 Sep 09 03:25 PM

[ussmls7:]

YES, I AGREE WITH YOU, T, BUTLER HAS LISTED A WAY TO EMAIL THOSE 4, AND ALL YOU HAVE TO DO IS PRINT OUT HIS REPORT ,THE ROYAL SCAM, IT HAS ALL YOU NEED TO ADRESS THOSE THAT ARE SCAMING THE SILVER OWNERS. I HOPE ALL THAT VISIT THIS SITE, & SILVERSEEK.COM WILL FLOOD THOSE 4 WITH THE QUESTIONS MR BUTLER HAS LAY OUT FOR YOU, THEN WE MAY SEE SOME HEADS ROLL, AND THE PRICE OF SILVER HIT THE MOON. A TIME TO CALL TO ACTION, ALL THAT ARE TIRED OF A FEW STEALING OUR MONEY.

2007 Sep 09 04:15 PM