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Patrick MontesDeOca
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Published Technical Analyst, Author, Commodity Trader, Systems Developer, Algorithmic Intelligence, Computer Modeling of Processes. I custom build Proprietary Artificial Intelligence for each individual client's portfolio needs. After more 30 years in the business, Patrick MontesDeOca has... More
My company:
Equity Management Academy
My blog:
Trading Talk
My book:
Vedic Codes of the Stock Market Volume 3 – ETFS
  • PART II – How To Trade The Silver Market! 0 comments
    Feb 9, 2012 5:37 PM
    PART II - How To Trade The Silver Market!
    by pmontesdeoca

    I want to show you basically here on this chart what the silver market, from a technical, western formula status quo and conventional wisdom point of view is indicating that we have been coming out of this descending wedge pattern, breaking below that level and coming out of this formation here was really confirmation that the bottom is in.

    Using this chart in identifying the bottom, obviously in December 29, and anticipating the top on April 28, in silver, we get what appears to be once again a down flag formation. The market is breaking out in a descending wedge within a double bottom. You are beginning to see a very very bullish picture.

    Using the Fibonacci Retracements, we are looking at prices of up to 32.65, which I believe we met. I believe that we're in the process of moving into that direction. The high today was about 33.40, so we are pretty much moving up into this next target of 35.54, which is a 50% Retracement. The 38 level is breaking above this down flag formation and will basically put the market into an accelerated volatility level that will ultimately accomplish the fractal objective of about 52 plus at a minimum target to the upside. This is what will confirm this target to be in place, once we go through it on a weekly basis closing above 38 dollars an ounce.

    We are again trading the silver market because it's offering what I believe to be a historical relationship!

    If you use the gold and silver ratio, you see that silver is tremendously undervalued from an economical point of view and we have been able basically to identify where the money is in terms of buying the physical bullion, which is around 27 to 28 dollars an ounce. This is where the money in the physical market seems to be coming in and I think we found a very solid floor in gold around 1,535 to 1,550 and silver just under 27 dollars an ounce. I believe that based on the work that I'm doing here it seems to indicate that we are entering into this acceleration phase.

    One of the things that we specialize in, is basically dealing with the actual physical silver bullion. We can deliver the actual physical 99.9 purity to anywhere, any destination of your choice anywhere in the world. This is bonded, 99.9 certified.

    So, we were combining basically the actual buying of physical and recommending to make it the very foundation of your portfolio. Not to trade the physical itself but simply to use it for you to hedge against this crisis that inevitably is coming as a result of this out of control debt.

    We are entering the last stages of this debt where the interest payments alone based on the ratio of the cost of interest rates are going to grow exponentially where we are going to see a tremendous amount of pressure on our own balances, debt and interest payments. And obviously there doesn't seem to be any indication from this administration that they're serious about reducing the debt. I don't see or hear anything, so I think what we're moving into eventually is potentially this explosive move of panic demand that probably is one of the biggest most explosive phases in precious metals.

    To be continued...

    Disclosure: I am long AG, AGQ, PSLV.

    Additional disclosure: PRECIOUS METALS TRADING INVOLVES SIGNIFICANT RISK OF LOSS AND IS NOT SUITABLE FOR EVERYONE PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.

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