Tuesday, September 13, 2011

Clive Maund: Silver Has Topped, Preparing to Plunge Below $20

Silver 3-Year Chart.

Hunt Brothers comparison. Check
"Long term top" used prominently.  Check.
Release coordinated with several other bearish silver analyst pieces. Check.
Fear as the main reader response intended by the author. Check.
The Bernank speaking and likely announcing QE3 within the week. Check.

If only Clive could be right just once...The Doc would love to accumulate some more phyzz under $20.

(after Clive's uber bearish statements on silver, we'll examine a few of his prior calls to determine what type of respect his calls deserve- this will be fun)

It now looks like a very dangerous wave pattern is completing in silver - the B-wave of a large A-B-C correction, and if this interpretation is correct, which is being made a lot more likely by the increasingly bearish action in gold and the dollar breakout, we could be about to witness a devastating C-wave crash in silver, which will wipe a lot of silver speculators. With the price and its moving averages now considerably more tightly bunched than they were before the May smash, there is the potential for the price to break down rapidly through these moving averages, despite their positive alignment, take out the support near the May - June lows and enter into a near vertical descent.
On its 6-year chart silver looks like it is completing a classic large top formation. First it rose vertically to hit its most overbought levels late in April since the good old days of the Hunt brothers back in 1980.

Then a panic selloff hit, triggered ostensibly by hiked margin requirements (of course, its being insanely overbought had nothing to do with it), all of which was accompanied by the huge volume characteristic of a top. Lastly, the johnny-come-latelies are corralled into silver by proliferating cheerleaders to drive the weak rally back towards the highs that we have seen over the past couple of months. There is just one instalment left to go, the drop down to the support shown at the lower boundary of the top area, the failure of that support, and the final devastating plunge that leaves hordes of silver speculators hung up in the large top area and smarting from massive losses.

Here's Clive's current fear-inducing-silver-to-ZERO chart.

Ok, before you rush out and sell your silver, lets look at a few of Clive's previous calls on gold and silver over the past couple years.

First it was a GIANT DOUBLE TOP in silver at 19.

Silver 3-Year Chart

LOL, yup, nice call there Clive.

Then there was the "head and shoulders" top.

Yup, nice call there Clive, that head and shoulders top sent silver headed to $50 within a month of this 2010 post.

Yup, great call Clive on the HUI making a massive double top at 450. LOL

Gold: 6-month chart to March 21, 2010

Yup, gold plunged from $1100 to $1923 after this head and shoulders top Clive. LOL

We could go on all day, but we think you get the point.
This is what happens when you analyze an asset class using ONLY technical analysis, ignoring macro-ecomonic implications and overall fundamentals.
What has changed since Clive proclaimed a double top in silver at $19?
Yet his charts will proclaim a double top again at $50.
TA can be used to assist in trading/ accumulating, but it MUST be overlaid on a correct FUNDAMENTAL analysis.