Friday, March 25, 2011

Bob Moriarty Calls Silver Top

While most of our readers will not enjoy this article, we will post it for your analysis.
Bob is far from the most humble commentators on the gold and silver market, but we have seen him make some pretty good calls in the past- we best remember his calling the top in gold around $1200 only a couple days before gold topped and corrected down towards $900 (he also proudly states that call in this article, lest any forget).
While we agree that its likely silver will have a decent correction soon (likely after reaching our near term target of $40), we do not see a massive down leg like the one in 2008.  Could silver correct down to the $25-$30 range? Sure.  As these prices were seen as recently as 2 months ago, a correction to $25-$30 would be a normal bull market action. Hardly the most over rated investment in the universe right now...that would be Apple or Netflix stock.  We don't see 99% of the public owning silver, which would be what it would take to make silver the most over rated investment in the universe.
Maybe Bob's right about a short term top.  If so, great, we can add to our purchases to prepare for the next leg up, as silver's fundamentals have not changed.

Is Silver Topping?

Bob Moriarty
Mar 25, 2011

Price is always right. Opinions are often wrong. I’d love to take credit for being the first to say that but I’m not.
I wrote recently about silver getting toppy and said that when I saw a temporary top I’d say so.
So. It’s a temporary top. Silver has doubled since late August. It’s gone up about 45% since a small correction at the end of January and all sorts of pundits are claiming that silver is moving from weak hands into strong hands. Silver was up today for the 7th day in a row before collapsing and causing an outside day.
We may have a couple more days of rises but this market is getting pretty tired.
People who bought silver at $4 an ounce or $5 or $6, those are strong hands. Those are the strongest of strong hands. Every person selling silver today as it went through $38 sold at a profit. The strong hands sold into the weakest of weak hands. It’s weak hands buying right now, the guys who made fun of people buying $4 silver.
Ignore the news; silver has no more to do with Portugal and their financial problems or nuclear melt down in Japan than it has to do with the price of kitty litter. Guys reading the news know nothing about commodities or silver. Hell, half the silver bugs don’t know anything about silver, it’s the most over rated investment in the universe right now.
If silver goes up and a black lady won Miss America, the newsreaders say silver went up because a black lady won Miss America. If silver went up and a bullfrog won Miss America, they would dutifully write that silver went up because a bullfrog won Miss America.
Commodites go up and down in a far more random manner than anyone wants to admit. The last time I called a top, I was off by three days and almost $40 in gold. That’s close enough for government work. I might be off by a couple of days in silver and maybe a couple of bucks but I see way too much bullishness.
The next major move in silver is down. A lot more than the silver bulls want to face. When silver permabulls throw in the towel and give up, I’ll be a buyer again.

Mar 24, 2011

Bob Moriarty