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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum
GLD 411.49+0.6%Jan 8 4:00 PM EST
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To: TobagoJack who wrote (73649)4/29/2011 1:35:00 PM
From: pogohere  Read Replies (2) of 219160
 
re: silver:

No Sign of the Top in Silver

Silver is finally getting some attention in the 10th year of its bull market run - mostly top callers who are calling the recent move to nearly $50 an ounce a sign that it has already peaked. Interestingly, these same analysts were nowhere to be found when we made the logical argument that it would reach $50 an ounce this year.

There have been many excuses in the past 10 years why investing in silver was a horrible idea, but the most recent is that it has already gone through its "parabolic" spike phase. Notice that this is always backed up with a well chosen linear chart that fits the author's linear thinking.



Of course that looks scary. However, any chart with a linear growth rate will appear geometric when compounded. A true parabolic move must be measured in logarithmic notation to be properly detected.



Using the above chart all we see is an asset catching up to its original trend line. Silver was already headed to $50 in 2007, but was suppressed in 2008. To compensate, the angle of the trend line increased simply because silver has had so much catching up to do. If there was a parabolic move, it was from 40 to 49, and is typical of short term tops as it became overbought on a short term basis.

For anyone looking for a real parabolic move to worry about, consider the following chart (click to enlarge) of US Gross Federal Debt.



from: seekingalpha.com
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