tag:blogger.com,1999:blog-5468840939085791352024-03-05T11:50:37.476-08:00Simple DigressionsSimple Digressionshttp://www.blogger.com/profile/10996326569422618066noreply@blogger.comBlogger534125tag:blogger.com,1999:blog-546884093908579135.post-27021652542814441362018-12-02T08:37:00.000-08:002018-12-02T09:11:52.764-08:00Copper - What Is On The Cards?<br />
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "verdana" , sans-serif;">On September 18, 2018 I wrote a
short <a href="https://prostedywagacje.blogspot.com/2018/09/copper-looks-promising.html" target="_blank">piece</a> on copper. At that time I was bullish but the red metal, contrary
to my opinion, went slightly up and then entered a pretty long consolidation
period. And up to now nothing has changed. </span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "verdana" , sans-serif;">Further, consolidation periods
are hard to analyze. However, there are some tools that may help to identify
the state of the market during these problematic periods.</span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "verdana" , sans-serif;">In our case - as the chart below
shows, since middle September 2018 the copper has been trading in a narrow
range of $2.65 – $2.88 per pound (the green rectangle):</span></div>
<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjTFZfYOXQD7hbZ3Fnmg5_6hIujqDaD-7tjohrvEXv3zSljeILFqeFY_G2JbHCnQgr3VDOQBWwXdwG0k4JG-9a-xRpQyOS8zi5jYnJkKe4RVpnEiq2dvQrZ1BmOx4NS6EUfw_DRc8hz_SM/s1600/copper.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="471" data-original-width="632" height="297" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjTFZfYOXQD7hbZ3Fnmg5_6hIujqDaD-7tjohrvEXv3zSljeILFqeFY_G2JbHCnQgr3VDOQBWwXdwG0k4JG-9a-xRpQyOS8zi5jYnJkKe4RVpnEiq2dvQrZ1BmOx4NS6EUfw_DRc8hz_SM/s400/copper.jpg" width="400" /></a></div>
<br />
<br />
<div class="MsoNormal">
<span style="font-family: "verdana" , sans-serif;">Source: Stockcharts</span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "verdana" , sans-serif;">It is a stressful situation for
investors and speculators and many of them are wondering what next is on the
cards. Let me try to give you a clue using the Commitments of Traders reports.
To remind you, these reports disclose the positions held by a few groups of
traders involved on the copper futures market. Today I would like to discuss
the positions held by the so-called Money Managers (big speculators trading copper
futures). Let me divide these traders into two groups: the bulls (Money
Managers holding a gross long position in copper futures) and the bears (Money
Managers holding a gross short position).</span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "verdana" , sans-serif;">Now, according to the COT
reports, between September 18, 2018 and November 17, 2018 (the consolidation
period) <b>the bears cut their bearish bets
by 15.6 thousand contracts while the bulls increased their position by 14.5
thousand contracts</b>. What does it mean? Well, it looks like the current consolidation
period has been used by the bulls to increase their bullish position in copper
futures. On the other hand, the bears have retreated losing the initiative on
behalf of the bulls.</span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "verdana" , sans-serif;">So the final outcome is as
follows: in my opinion, the copper is getting ripe for another leg up. This
thesis is additionally supported by a few historical facts. For example, the
previous consolidation period (April 2018 – May 2018) looked similarly – the
copper prices were flat and the bulls were taking the initiative; then, in June,
copper prices started a strong move up. </span></div>
<br />
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: verdana, sans-serif;">Last but not least – look at this
chart:</span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjUt75bmDfNkZNh_EQHOU6WPXiK3tr4DYGd6AhgMKfTVIl879H8aC0rTSZGBE2t45RPdEl-BJQFaKEEmv4WkCbFZqH5Q6DwmZqPW24Sm6B_WKqrqQ7iRGr-Kc04iwfvNhnUtObDLCVGosQ/s1600/copper+stoskc.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="414" data-original-width="666" height="247" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjUt75bmDfNkZNh_EQHOU6WPXiK3tr4DYGd6AhgMKfTVIl879H8aC0rTSZGBE2t45RPdEl-BJQFaKEEmv4WkCbFZqH5Q6DwmZqPW24Sm6B_WKqrqQ7iRGr-Kc04iwfvNhnUtObDLCVGosQ/s400/copper+stoskc.jpg" width="400" /></a></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "verdana" , sans-serif;">Source: Simple Digressions</span></div>
<div class="MsoNormal" style="text-align: justify;">
</div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "verdana" , sans-serif;">The chart shows the global stocks
of refined copper reported by the world’s main exchanges: COMEX, LME and SFE
(the Shanghai Futures Exchange). Note that since the end of March 2018 the
stocks have gone down by 605 thousand tons (a drop of 57%). Definitely, it is a
long-term bullish signal for copper but we should keep in mind that the
physical market is of limited value as long as trading decisions are concerned. </span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
Simple Digressionshttp://www.blogger.com/profile/10996326569422618066noreply@blogger.com3tag:blogger.com,1999:blog-546884093908579135.post-15672681637229405022018-11-30T09:34:00.003-08:002018-11-30T09:34:56.077-08:00Newsletter - Update<h3 class="post-title entry-title" itemprop="name" style="background-color: white; color: #222222; font-size: 22px; font-stretch: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-weight: normal; line-height: normal; margin: 0.75em 0px 0px; position: relative;">
<span style="font-size: x-small;"><span style="font-family: Verdana, sans-serif;">The tenth issue of Newsletter has been just dispatched. Please, check your e-mail boxes and let me know if there is any problem.</span></span></h3>
Simple Digressionshttp://www.blogger.com/profile/10996326569422618066noreply@blogger.com1tag:blogger.com,1999:blog-546884093908579135.post-89750481694511774222018-11-08T03:09:00.003-08:002018-11-08T03:11:39.962-08:00Gold Whispers That The US Dollar Is Ahead Of A Leg Down<br />
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "verdana" , sans-serif;">In my last piece on the US dollar
and gold (October 21, 2018) I made the following conclusion:</span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div class="MsoNormal" style="text-align: justify;">
<i style="mso-bidi-font-style: normal;"><span style="font-family: "verdana" , sans-serif;">“It has to be also noted that the excessive optimism among the
speculators trading US dollar index futures is accompanied by extreme pessimism
among their fellows trading gold futures. As a result, there is an extremely
positive mix of sentiment, supporting a bullish thesis on gold and the precious
metals market”<o:p></o:p></span></i></div>
<div class="MsoNormal" style="text-align: justify;">
<i style="mso-bidi-font-style: normal;"><span style="font-family: "verdana" , sans-serif;"><br /></span></i></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "verdana" , sans-serif;">Since the publication the gold
has not changed its price while the US dollar is up 0.4%. So, generally, both
instruments have done nearly nothing. It means that it is a good time to look
at the general picture once again. Here it is:</span></div>
<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgqx0u1FEIv3Msh_ZDZFs6t5GVIIBEyedkMJ24xy14xhAWv_YeXxypxr9stL4LdJda4WqOHETnFsPpzXVWHaIjqmIpLwZecUN4eqZMic6gtGxBytUTXk-038Zm8N2gbz8o4aG2t7lLp-YA/s1600/gold+usd.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="500" data-original-width="669" height="298" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgqx0u1FEIv3Msh_ZDZFs6t5GVIIBEyedkMJ24xy14xhAWv_YeXxypxr9stL4LdJda4WqOHETnFsPpzXVWHaIjqmIpLwZecUN4eqZMic6gtGxBytUTXk-038Zm8N2gbz8o4aG2t7lLp-YA/s400/gold+usd.jpg" width="400" /></a></div>
<br />
<br />
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "verdana" , sans-serif;">Source: Stockcharts</span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "verdana" , sans-serif;">I think the chart shows quite an
interesting pattern:</span><br />
<ul>
<li><span style="font-family: "verdana" , sans-serif;">The US dollar is printing a double top formation
(the green, horizontal line)</span></li>
<li><span style="font-family: "verdana" , sans-serif;">The gold is relatively strong, compared to the
greenback (two red circles)</span></li>
</ul>
</div>
<span style="font-family: "verdana" , sans-serif; text-align: justify;">Logically, when the US dollar is
topping the gold is supposed to test its previous bottom but…it is not the case
now. Note that at the latest US dollar top (October 31, 2018) the gold, instead
of getting close to the latest bottom at $1,170 - $1,180 per ounce, was
standing at $1,215 per ounce.</span><br />
<br />
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "verdana" , sans-serif;">In other words, the gold is
suggesting us that the scenario discussed in my latest articles (bullish
for gold and bearish for the US dollar) is still valid.</span></div>
Simple Digressionshttp://www.blogger.com/profile/10996326569422618066noreply@blogger.com1tag:blogger.com,1999:blog-546884093908579135.post-51032931000634895652018-11-05T07:24:00.001-08:002018-11-05T07:24:34.574-08:00Newsletter - Update<h3 class="post-title entry-title" itemprop="name" style="background-color: white; color: #222222; font-stretch: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-weight: normal; line-height: normal; margin: 0.75em 0px 0px; position: relative;">
<span style="font-family: Verdana, sans-serif; font-size: small;">The ninth issue of Newsletter has been just dispatched. Please, check your e-mail boxes and let me know if there is any problem.</span></h3>
Simple Digressionshttp://www.blogger.com/profile/10996326569422618066noreply@blogger.com0tag:blogger.com,1999:blog-546884093908579135.post-66674116461644063222018-10-21T09:27:00.001-07:002018-10-21T09:27:37.017-07:00A Quick Look At Gold And US Dollar (Going In Tandem)<br />
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: Verdana, sans-serif;">On September 30, 2018 I published
a short piece on the US dollar. The conclusion was as follows:</span></div>
<div class="MsoNormal" style="text-align: justify;">
<i style="mso-bidi-font-style: normal;"><span style="font-family: Verdana, sans-serif;">…if something cannot go up pushed by hordes of optimists, it is
supposed to go down. Summarizing – I am bearish on the US dollar in the medium
term”<o:p></o:p></span></i></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: Verdana, sans-serif;"><br /></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: Verdana, sans-serif;">After nearly one month the
situation has not changed too much. Over that period:</span></div>
<ul>
<li><span style="font-family: Verdana, sans-serif;"><span style="text-indent: -18pt;">The bears (big speculators betting on a weaker
US dollar) increased their bets by 1.5 thousand contracts</span></span></li>
<li><span style="font-family: Verdana, sans-serif;"><span style="text-indent: -18pt;">The bulls (big speculators betting on a stronger
US dollar) added 2.4 thousand contracts to their bullish bets</span></span></li>
<li><span style="font-family: Verdana, sans-serif;"><span style="text-indent: -18pt;">As a result, the total balance was positive for
the bulls – a net long position held by big speculators in US dollar index futures
has risen by 0.9 thousand contracts</span></span></li>
</ul>
<br />
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: Verdana, sans-serif;"><br /></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: Verdana, sans-serif;">A</span><span style="font-family: Verdana, sans-serif;">s a result, the average
speculator trading US dollar index futures is overly optimistic about the US
currency but the problem is that this huge optimism has only marginal impact on
the greenback itself – since September 30, 2018 the US dollar has strengthened
by a mere 0.7%. I am not surprised – if everybody is in one camp, most probably
the opposite happens.</span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: Verdana, sans-serif;"><br /></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: Verdana, sans-serif;">What is more, over that period
the gold has strengthened as well (by 2.7%) so we have quite an interesting
situation where the gold (red arrow) and the US dollar (green arrow) are going
in the same direction:</span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: Verdana, sans-serif;"><br /></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg_7xEfb-9oDGzwdnj0uvNVyYWgbFdFKzy2uyF0RJxqdoNMwiGjVrOq4-8Jc7lC1lX0iPjuDxHl9o-BwqprvdBEbcn0dcdcLtZTf3hvB2dzskXBgrlxvgVZk6-GgYxXrqoFe8D3ka5Rfhk/s1600/usd.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="502" data-original-width="672" height="297" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg_7xEfb-9oDGzwdnj0uvNVyYWgbFdFKzy2uyF0RJxqdoNMwiGjVrOq4-8Jc7lC1lX0iPjuDxHl9o-BwqprvdBEbcn0dcdcLtZTf3hvB2dzskXBgrlxvgVZk6-GgYxXrqoFe8D3ka5Rfhk/s400/usd.jpg" width="400" /></a></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: Verdana, sans-serif;"><br /></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: Verdana, sans-serif;">Source: Stockcharts.com</span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: Verdana, sans-serif;"><br /></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: Verdana, sans-serif;">It has to be also noted that <b style="mso-bidi-font-weight: normal;">the excessive optimism among the
speculators trading US dollar index futures is accompanied by extreme pessimism
among their fellows trading gold futures</b>. As a result, there is an
extremely positive mix of sentiment, supporting a bullish thesis on gold and
the precious metals market.<span style="mso-spacerun: yes;"> </span></span></div>
<br />Simple Digressionshttp://www.blogger.com/profile/10996326569422618066noreply@blogger.com9tag:blogger.com,1999:blog-546884093908579135.post-57787305096780649992018-09-30T13:35:00.002-07:002018-09-30T13:35:34.836-07:00US Dollar - I Am Bearish<br />
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: Verdana, sans-serif;">According to the COT data, since
May 29, 2018 the big speculators betting on a stronger dollar have increased
their bullish bets by 13.0 thousand contracts. Over that period the bears (big
speculators betting on a weaker dollar) cut their bets by 21.4 thousand
contracts. As a result, a net long position held by these traders went up by
34.4 thousand contracts but…the US dollar index has not changed at all (94.8 on
May 29 compared to 94.7 on September 28):</span></div>
<br /><br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgY3IhXa8u6unC2MzwHGthxQkcu8lnBQt3e1Bl9SJuBRHqU6SVhoX_G8k3zQsIMFTgIUZONXlFpt2nZQObap2mWBzEe5XhxkJPK0aZCVUIy9-sGJyGCYLFtSnBJUqyJUwaTIb1zEPlye44/s1600/usd.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="621" data-original-width="972" height="255" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgY3IhXa8u6unC2MzwHGthxQkcu8lnBQt3e1Bl9SJuBRHqU6SVhoX_G8k3zQsIMFTgIUZONXlFpt2nZQObap2mWBzEe5XhxkJPK0aZCVUIy9-sGJyGCYLFtSnBJUqyJUwaTIb1zEPlye44/s400/usd.jpg" width="400" /></a></div>
<br />
<span style="font-family: Verdana, sans-serif;">source: Simple Digressions</span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: Verdana, sans-serif;">What is the takeaway for
speculators? Well, in my opinion, if something cannot go up pushed by hordes of
optimists, it is supposed to go down. Summarizing – I am bearish on the US
dollar in the medium term.</span></div>
<br />Simple Digressionshttp://www.blogger.com/profile/10996326569422618066noreply@blogger.com0tag:blogger.com,1999:blog-546884093908579135.post-80698335245757892882018-09-18T13:42:00.004-07:002018-09-18T13:42:48.387-07:00Copper Looks Promising<br />
<div class="MsoNormal" style="text-align: justify;">
I<span style="font-family: Verdana, sans-serif;">t looks like there is a good
chance for better times for copper. Look at the chart below:</span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="mso-no-proof: yes;"><span style="font-family: Verdana, sans-serif;"><br /><!--[endif]--></span></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjGS_42c782shfCLfwWIzFr5LZIN18crooIY0R8I2wDUN4xa2oJONC_CViVwBdzaEF2AHbO0lIs37TBzHJVFpuK_nNgnHq16z9Vf_sJgHQdCvBfo-sXbgVeKJyPYbGR9F-0aPDKXcS8qTc/s1600/cop.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="521" data-original-width="825" height="252" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjGS_42c782shfCLfwWIzFr5LZIN18crooIY0R8I2wDUN4xa2oJONC_CViVwBdzaEF2AHbO0lIs37TBzHJVFpuK_nNgnHq16z9Vf_sJgHQdCvBfo-sXbgVeKJyPYbGR9F-0aPDKXcS8qTc/s400/cop.jpg" width="400" /></a></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="mso-no-proof: yes;"><span style="font-family: Verdana, sans-serif;"><br /></span></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="mso-no-proof: yes;"><span style="font-family: Verdana, sans-serif;"><br /></span></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: Verdana, sans-serif;">Source: Simple Digressions and
the COT data</span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: Verdana, sans-serif;"><br /></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: Verdana, sans-serif;">Note that now the so-called
commercials, mostly copper producers, hold a net long position in copper
futures (the red circle). Last time they held a similar position was October
2016 when copper prices were at the beginning of a vicious bull market (the
green circle). </span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: Verdana, sans-serif;"><br /></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: Verdana, sans-serif;">If I am correct, we may be ahead
of another leg up in copper and this week’s white bullish candle (just forming)
could be the first sign of it:</span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="mso-no-proof: yes;"><span style="font-family: Verdana, sans-serif;"><br /><!--[endif]--></span></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgjXOVJqac9i45jnFqRRGY__SuobyP1BAyg0gQRi_q2udtD2EM4O2MLNqeiEJV4y4C4BPnb1sVzEyRDWwcWowSIV2mQ2VwP93RQ0qxcTEKGiwQ2B3u_Wd0tZiG5kSyHGJzJ1bGqrfGJJ3k/s1600/copper.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="501" data-original-width="664" height="301" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgjXOVJqac9i45jnFqRRGY__SuobyP1BAyg0gQRi_q2udtD2EM4O2MLNqeiEJV4y4C4BPnb1sVzEyRDWwcWowSIV2mQ2VwP93RQ0qxcTEKGiwQ2B3u_Wd0tZiG5kSyHGJzJ1bGqrfGJJ3k/s400/copper.jpg" width="400" /></a></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="mso-no-proof: yes;"><span style="font-family: Verdana, sans-serif;"><br /></span></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="mso-no-proof: yes;"><span style="font-family: Verdana, sans-serif;"><br /></span></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: Verdana, sans-serif;">Source: Stockcharts.com</span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<br />Simple Digressionshttp://www.blogger.com/profile/10996326569422618066noreply@blogger.com0tag:blogger.com,1999:blog-546884093908579135.post-73382492683607686252018-09-13T10:55:00.000-07:002018-09-13T10:55:12.248-07:00The Eighth Issue of Simple Digressions Newsletter Has Been Dispatched<h3 class="post-title entry-title" itemprop="name" style="background-color: white; color: #222222; font-size: 22px; font-stretch: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-weight: normal; line-height: normal; margin: 0.75em 0px 0px; position: relative;">
<span style="font-size: x-small;"><span style="font-family: Verdana, sans-serif;">The eighth issue of my Newsletter has been just dispatched. Please, check your e-mail boxes and let me know if there is any problem.</span></span></h3>
Simple Digressionshttp://www.blogger.com/profile/10996326569422618066noreply@blogger.com0tag:blogger.com,1999:blog-546884093908579135.post-7821519806313148662018-09-11T15:01:00.006-07:002018-09-11T15:02:25.333-07:00US Dollar At A Pivotal Point<span style="font-family: "verdana" , sans-serif;">I am pretty sure that the gold bugs are totally depressed now. Since May 2018 gold and silver have been in their short-term downward trends and, despite extreme pessimism among North American speculators trading gold and silver futures, it looks like the precious metals market is doomed.</span><br />
<span style="font-family: "verdana" , sans-serif;"><br /></span>
<span style="font-family: "verdana" , sans-serif;">However, wait a moment and look at this chart:</span><br />
<span style="font-family: "verdana" , sans-serif;"><br /></span>
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhvOVka9HO3Y5P1tQl1aijBe6Y6IUMFLdE63SXchdz8MN-dKL-tRkSaK5bZ8D2MF7SFcBdrpUGZo06F3DCJXEQn5nouvQ9Nm-8AJNEKLTIEiS8PS4ANZa1n10gRk45aaBpLM61LFgG3gV0/s1600/wyk.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="501" data-original-width="675" height="296" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhvOVka9HO3Y5P1tQl1aijBe6Y6IUMFLdE63SXchdz8MN-dKL-tRkSaK5bZ8D2MF7SFcBdrpUGZo06F3DCJXEQn5nouvQ9Nm-8AJNEKLTIEiS8PS4ANZa1n10gRk45aaBpLM61LFgG3gV0/s400/wyk.jpg" width="400" /></a></div>
<span style="font-family: "verdana" , sans-serif;"><br /></span>
<span style="font-family: "verdana" , sans-serif;">source: Stockcharts.com</span><br />
<span style="font-family: "verdana" , sans-serif;"><br /></span>
<span style="font-family: "verdana" , sans-serif;">Well, I hate classic technical analysis indicators as, for example, the MACD (Moving Average Convergence / Divergence) indicator (the lower panel of the chart) but sometimes these indicators work quite well (and, please, do not ask my why - I have no idea). </span><br />
<span style="font-family: "verdana" , sans-serif;"><br /></span>
<span style="font-family: "verdana" , sans-serif;">In the case of MACD - note that in the beginning of 2017 it delivered a SELL signal for the US dollar index (the red circle). Shortly after the US dollar started a long-term downward trend.</span><br />
<span style="font-family: "verdana" , sans-serif;"><br /></span>
<span style="font-family: "verdana" , sans-serif;">Interestingly, these days MACD is very close to generate a SELL signal once again (the blue circle). If that is the case, the precious metals market (very often going in the opposite direction to the US dollar) could start a new leg up that nobody expects. </span><br />
<span style="font-family: "verdana" , sans-serif;"><br /></span>
<span style="font-family: "verdana" , sans-serif;">Summarizing - it looks like the US dollar is at its pivotal point now. From the technical point of view it should renew its upward trend very soon (probably this week). </span><br />
<span style="font-family: "verdana" , sans-serif;"><br /></span>
<span style="font-family: "verdana" , sans-serif;">But if it does not, we may see a sudden and rapid deterioration and...a restart of an upward trend in precious metals.</span><br />
<span style="font-family: "verdana" , sans-serif;"><br /></span>
<span style="font-family: "verdana" , sans-serif;"><br /></span>
Simple Digressionshttp://www.blogger.com/profile/10996326569422618066noreply@blogger.com0tag:blogger.com,1999:blog-546884093908579135.post-11964932748271632712018-07-26T14:23:00.001-07:002018-07-26T14:23:59.723-07:00Chart Of The Day - Trend Following In Action<span style="font-family: Verdana, sans-serif;">Today just one chart illustrating how "Trend following approach" works:</span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="font-family: Verdana, sans-serif;"><b>Facebook:</b></span><br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEijvzqxzH0oxqjZfbxoWxfjAFaYiMPVROvvvZXKYGozovM1cpjVUUM_ecXP-8FWz3C5IAdvXFuPlynQ1mFvSh5WMEDUBrZna5X9XPHqsVGMNMSe3A5aqY-s5BXCoMBpesTs5XxN7WMpMaQ/s1600/fb.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="501" data-original-width="673" height="476" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEijvzqxzH0oxqjZfbxoWxfjAFaYiMPVROvvvZXKYGozovM1cpjVUUM_ecXP-8FWz3C5IAdvXFuPlynQ1mFvSh5WMEDUBrZna5X9XPHqsVGMNMSe3A5aqY-s5BXCoMBpesTs5XxN7WMpMaQ/s640/fb.jpg" width="640" /></a></div>
<br />
<span style="font-family: Verdana, sans-serif;">source: Stockcharts.com</span><br />
<br />Simple Digressionshttp://www.blogger.com/profile/10996326569422618066noreply@blogger.com0tag:blogger.com,1999:blog-546884093908579135.post-25880798448314371952018-07-23T08:01:00.002-07:002018-07-23T08:02:01.547-07:00Seventh Issue Of Newsletter Has Been Dispatched<h3 class="post-title entry-title" itemprop="name" style="background-color: white; color: #222222; font-stretch: normal; font-weight: normal; line-height: normal; margin: 0.75em 0px 0px; position: relative;">
<span style="font-family: Verdana, sans-serif; font-size: small;">The seventh issue of my Newsletter has been just dispatched. Please, check your e-mail boxes and let me know if there is any problem.</span></h3>
Simple Digressionshttp://www.blogger.com/profile/10996326569422618066noreply@blogger.com0tag:blogger.com,1999:blog-546884093908579135.post-39754793715729948772018-07-15T13:54:00.003-07:002018-07-15T13:54:44.493-07:00US Stocks - Is It A Healthy Bull Market?<span style="font-family: Verdana, sans-serif;">Although NASDAQ is making new historical highs, the market internals do not support these tops. Look at the chart below:</span><br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiCa8GIH-REBOTPLp7P2KUgFReyZWl_b04hmyjbMMQ5FM4A1WOaKJCkVnft368a8PVxywtE4M0EEbQHtFdyFJEfNJHCDTLiyb8sLo4w65Z3zjvYuDnmz1-He8DIoz407kSV6P6F0xOAhls/s1600/ndx.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="502" data-original-width="668" height="300" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiCa8GIH-REBOTPLp7P2KUgFReyZWl_b04hmyjbMMQ5FM4A1WOaKJCkVnft368a8PVxywtE4M0EEbQHtFdyFJEfNJHCDTLiyb8sLo4w65Z3zjvYuDnmz1-He8DIoz407kSV6P6F0xOAhls/s400/ndx.jpg" width="400" /></a></div>
<br />
<span style="font-family: Verdana, sans-serif;">source: Stockcharts.com</span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="font-family: Verdana, sans-serif;">The lower panel of the chart shows the amount of stocks establishing new 52-week highs. Note that despite the index making new all-time highs (the blue arrrow on the upper panel of the chart), the amount of stocks doing the same is rapidly going down (the red arrow).</span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="font-family: Verdana, sans-serif;">Well, it is not a typical pattern printed by a healthy bull market...</span>Simple Digressionshttp://www.blogger.com/profile/10996326569422618066noreply@blogger.com0tag:blogger.com,1999:blog-546884093908579135.post-57162477506435869452018-07-08T13:59:00.001-07:002018-07-08T13:59:33.908-07:00Are We In A Bear Or Bull Market In Precious Metals?<span style="font-family: Verdana, sans-serif;">The gold market looks like being in a typical short-term bear cycle:</span><br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgHuOBdHLEvnfsARIujyGliyV0ankn26bLlZg-ZC7FX7qZMFM8wIXp8dFAK4JvoSbAzkSMjncWRdHYx8Pj1ksLzfPuHcx-SPFl-U7pEWYIhKbpxxTOQ9LcSGIh8nodrkcM_xtsWYudIdjE/s1600/gold.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="339" data-original-width="616" height="220" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgHuOBdHLEvnfsARIujyGliyV0ankn26bLlZg-ZC7FX7qZMFM8wIXp8dFAK4JvoSbAzkSMjncWRdHYx8Pj1ksLzfPuHcx-SPFl-U7pEWYIhKbpxxTOQ9LcSGIh8nodrkcM_xtsWYudIdjE/s400/gold.jpg" width="400" /></a></div>
<br />
<span style="font-family: Verdana, sans-serif;">The green line indicates that since middle April 2018 the gold has been in a downward trend.</span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="font-family: Verdana, sans-serif;">However, this chart says something different:</span><br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjF9zoTJEvnsTZoTeoF9Rq49KOZJbUxoGP9S44n1Rpaydh2arznnEtlydvSRMkB8bb9b87f3KiBOHyykxkVadD_YICKi1HTLx8WNyCGlZbi7ECo3qr8CvX8kerTAfj6SFBzlbmlTRpM6BY/s1600/silver+gold.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="344" data-original-width="614" height="223" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjF9zoTJEvnsTZoTeoF9Rq49KOZJbUxoGP9S44n1Rpaydh2arznnEtlydvSRMkB8bb9b87f3KiBOHyykxkVadD_YICKi1HTLx8WNyCGlZbi7ECo3qr8CvX8kerTAfj6SFBzlbmlTRpM6BY/s400/silver+gold.jpg" width="400" /></a></div>
<span style="font-family: Verdana, sans-serif;">The chart shows a popular gold market performance measure, the gold / silver ratio. To remind you, during the furious bull markets in precious metals the ratio is going up. And vice versa - during a bear market it goes down. The message delivered by the above picture is quite simple - the precious metals market is in a bull cycle.</span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="font-family: Verdana, sans-serif;">And the last chart:</span><br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEipZrXu-49u1TATJ7iR1BMEdI_ZV4OW5DMYdhYQweChuSs3ivfYOxLAIbs9hj-UCj0hQm5NfGMEd1kjsb45sj4pcuP1N4BHOtKzuvk4rBYLtjG3Ny4NHG7LuiIUQ-QxmKIDpEdD7tkJe24/s1600/gdx+gold.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="339" data-original-width="615" height="220" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEipZrXu-49u1TATJ7iR1BMEdI_ZV4OW5DMYdhYQweChuSs3ivfYOxLAIbs9hj-UCj0hQm5NfGMEd1kjsb45sj4pcuP1N4BHOtKzuvk4rBYLtjG3Ny4NHG7LuiIUQ-QxmKIDpEdD7tkJe24/s400/gdx+gold.jpg" width="400" /></a></div>
<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="font-family: Verdana, sans-serif;">This time the chart shows another popular performance measure, the GDX / gold ratio. Once again, during a typical bull market in precious metals GDX (or gold mining companies) outperform the gold itself. The blue up-trending line evidences that the precious metals market is in its bull cycle.</span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="font-family: Verdana, sans-serif;">So the question is: "Are we in a bear or bull market in precious metals?"</span>Simple Digressionshttp://www.blogger.com/profile/10996326569422618066noreply@blogger.com2tag:blogger.com,1999:blog-546884093908579135.post-29664917460347513602018-06-14T14:38:00.000-07:002018-06-14T14:38:04.904-07:00Latest Developments On The Precious Metals Market<span style="font-family: Verdana, sans-serif;">We live in interesting times. Generally, gold and the US dollar go in the opposite directions but after the latest FED decision both instruments go in tandem:</span><br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjpvsvFZClqNpeKnel1gjpsEOUsftWKZdXL6s99tWCBBCANA6ksbCnSckKlNwuecAhOnm0mLpWo606H5fOQV0HMUPzLRQsQ6ab-l0pVvXTOXvKN2BE0uFCBm3xHQQ1F5dCef43SFQbnL_o/s1600/gold+usd.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="680" data-original-width="530" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjpvsvFZClqNpeKnel1gjpsEOUsftWKZdXL6s99tWCBBCANA6ksbCnSckKlNwuecAhOnm0mLpWo606H5fOQV0HMUPzLRQsQ6ab-l0pVvXTOXvKN2BE0uFCBm3xHQQ1F5dCef43SFQbnL_o/s400/gold+usd.jpg" width="311" /></a></div>
<br />
<span style="font-family: Verdana, sans-serif;">source: stooq.com</span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="font-family: Verdana, sans-serif;">What is more, most recently the silver / gold ratio exploded to the upside but gold still cannot break above an ultra short-term resistance at $1,307 - $1,310 per ounce (the red, dotted line on the lower panel of the chart):</span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjC0PKaFcRZcGoR09wLQKOkjoZDLQjZvhtt8yroSwUdPXVyXeyZk8tsFZJJgSSKEXFiWJ2pxZ1T02f3P0_VizXAG-6_oYrWdha2gPRSHR68wqpATPrXyJ8_55nXZHPLjO6s324T5H5NPuQ/s1600/silver+ratiopn.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="597" data-original-width="461" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjC0PKaFcRZcGoR09wLQKOkjoZDLQjZvhtt8yroSwUdPXVyXeyZk8tsFZJJgSSKEXFiWJ2pxZ1T02f3P0_VizXAG-6_oYrWdha2gPRSHR68wqpATPrXyJ8_55nXZHPLjO6s324T5H5NPuQ/s400/silver+ratiopn.jpg" width="308" /></a></div>
<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="font-family: Verdana, sans-serif;">source: Simple Digressions</span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="font-family: Verdana, sans-serif;">Finally, </span><span style="font-family: Verdana, sans-serif;">JP Morgan is furiously hoarding silver:</span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="font-family: Verdana, sans-serif;"><br /></span>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjCGZ2_MAvWxinr-GEgWOaqeRd4T3aEOWFqevyzTefLIJg9S98ZwMxVbF7bHVg4hZhbgl6SSXQew9xtWbFHEhqWzuKQWyTL03GNwSQWyfWs-ox_LS6472zVoaIVJn8Rc0PM5lRs6pjuKmM/s1600/jpm.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="352" data-original-width="959" height="146" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjCGZ2_MAvWxinr-GEgWOaqeRd4T3aEOWFqevyzTefLIJg9S98ZwMxVbF7bHVg4hZhbgl6SSXQew9xtWbFHEhqWzuKQWyTL03GNwSQWyfWs-ox_LS6472zVoaIVJn8Rc0PM5lRs6pjuKmM/s400/jpm.jpg" width="400" /></a></div>
<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="font-family: Verdana, sans-serif;">source: Simple Digressions</span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="font-family: Verdana, sans-serif;">I think there is something big in the making...</span>Simple Digressionshttp://www.blogger.com/profile/10996326569422618066noreply@blogger.com0tag:blogger.com,1999:blog-546884093908579135.post-11626222251777857552018-06-14T13:59:00.000-07:002018-06-14T13:59:04.100-07:00Sixth Issue Of The Simple Digressions Newsletter<h3 class="post-title entry-title" itemprop="name" style="background-color: white; color: #222222; font-stretch: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-weight: normal; line-height: normal; margin: 0.75em 0px 0px; position: relative;">
<span style="font-family: Verdana, sans-serif; font-size: small;">The sixth issue of my Newsletter has been just dispatched. Please, check your e-mail boxes and let me know if there is any problem.</span></h3>
Simple Digressionshttp://www.blogger.com/profile/10996326569422618066noreply@blogger.com0tag:blogger.com,1999:blog-546884093908579135.post-84789050496130421882018-05-22T04:00:00.002-07:002018-05-22T04:00:40.778-07:00Gold And Silver - I Am An Optimist<span style="font-family: Verdana, sans-serif;">It happened at last. Now there is high or even extreme pessimism among big speculators trading precious metals futures on the COMEX. Look at these two charts:</span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhN2dHtYzFB0fP7RP5n4uydGDm8ZZMguFmCKJ85iq5M8jATI_Am3mQSgwlfBVdIOmETaxuNeDqdjhcdRGSYGOAJWgkJj3fcWzE4iVPmuukL9utH-q1mhc3Fyhm4nDqJWMn_cOtI_LRhtyk/s1600/gold.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="472" data-original-width="789" height="238" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhN2dHtYzFB0fP7RP5n4uydGDm8ZZMguFmCKJ85iq5M8jATI_Am3mQSgwlfBVdIOmETaxuNeDqdjhcdRGSYGOAJWgkJj3fcWzE4iVPmuukL9utH-q1mhc3Fyhm4nDqJWMn_cOtI_LRhtyk/s400/gold.jpg" width="400" /></a></div>
<span style="font-family: Verdana, sans-serif;"> source: Simple Digressions</span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<div class="separator" style="clear: both; text-align: center;">
</div>
<span style="font-family: Verdana, sans-serif;">and this one</span><br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhNqvtl3vqjqTRkaUW3WZGxTiHFjdy_U_rX5w17c7sjYGEteCRw6LBy2zyyZKOd-kNH3HFMCmyz7Ik8LcdgJzcBWI9rfwGK8D6IJU0Y_h6xBZxI8Uat1LIhywlsivH5rfwd82cT0d93PtQ/s1600/silver.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="475" data-original-width="741" height="255" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhNqvtl3vqjqTRkaUW3WZGxTiHFjdy_U_rX5w17c7sjYGEteCRw6LBy2zyyZKOd-kNH3HFMCmyz7Ik8LcdgJzcBWI9rfwGK8D6IJU0Y_h6xBZxI8Uat1LIhywlsivH5rfwd82cT0d93PtQ/s400/silver.jpg" width="400" /></a></div>
<span style="font-family: Verdana, sans-serif;"> source: Simple Digressions</span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="font-family: Verdana, sans-serif;">The chart shows current (as of May 15, 2018) net positions held by money managers (big speculators) in gold and silver futures at the COMEX. Note that these traders are very pessimistic about gold (red circles on the upper panel of the chart) and silver (blue circles on the lower panel). </span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="font-family: Verdana, sans-serif;">For example, money managers trading silver futures hold a large, net short position. Interestingly, even at the end of the latest bear market in precious metals (December 2015) these speculators were less pessimistic. </span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="font-family: Verdana, sans-serif;">The same pattern is visible on the gold chart - yes, money managers are now less pessimistic than at the end of 2015 but their pessimism is comparable to that visible at the latest bottoms (red circles).</span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="font-family: Verdana, sans-serif;">As a result, as a tough contrarian, I am once again optimistic about gold and silver in the short and long-term perspective.</span><br />
<br />Simple Digressionshttp://www.blogger.com/profile/10996326569422618066noreply@blogger.com0tag:blogger.com,1999:blog-546884093908579135.post-61236597238932484092018-05-20T08:45:00.000-07:002018-05-20T08:45:09.049-07:00Fifth Issue Of The Simple Digressions Newsletter<span style="font-family: Verdana, sans-serif;">The fifth issue of my Newsletter has been just dispatched. Please, check your e-mail boxes and let me know if there is any problem.</span>Simple Digressionshttp://www.blogger.com/profile/10996326569422618066noreply@blogger.com0tag:blogger.com,1999:blog-546884093908579135.post-71686235482270578342018-05-02T13:39:00.003-07:002018-05-03T03:07:38.495-07:00Despite The US Dollar Getting Stronger The Gold Holds Quite Well<span style="font-family: "verdana" , sans-serif;">After the FED's decision to keep interest rates unchanged the gold was quite strong. Despite the US dollar making another ultra-short term top, gold prices held well:</span><br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiiEHW1hDRVY2RbELgTDboPWbGg9Ra0ZQebEDL8S2aZUWS_wEG_YP8O6WxX0Rtt53uVd9TzXFjogjI7-fpJEp8O7kkV8WSRG5nIn3os8i4cPA0Qog_b6NTLgxajBwqd9F3_AG-uu37agAk/s1600/wyk.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="642" data-original-width="478" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiiEHW1hDRVY2RbELgTDboPWbGg9Ra0ZQebEDL8S2aZUWS_wEG_YP8O6WxX0Rtt53uVd9TzXFjogjI7-fpJEp8O7kkV8WSRG5nIn3os8i4cPA0Qog_b6NTLgxajBwqd9F3_AG-uu37agAk/s640/wyk.jpg" width="475" /></a></div>
<span style="font-family: "verdana" , sans-serif;">source: stooq.com</span><br />
<span style="font-family: "verdana" , sans-serif;"><br /></span>
<span style="font-family: "verdana" , sans-serif;">Note that yesterday (May 1) the US dollar broke above its resistance (the red line) but gold did not break below its ultra-short-term support (the green line). So there is a small, positive (for gold) divergence.</span><br />
<span style="font-family: "verdana" , sans-serif;"><br /></span>
<span style="font-family: "verdana" , sans-serif;">What does it mean? Generally, in the long term it means nothing at all (the big picture remains unchanged) but in the ultra-short-term we may see gold prices going a bit higher now (as I wrote in my latest <a href="https://prostedywagacje.blogspot.com/" target="_blank">piece</a> - it is a very primitive short term trade). </span><br />
<span style="font-family: "verdana" , sans-serif;"><br /></span>
<span style="font-family: "verdana" , sans-serif;">What is more, the GDX / gold ratio is supporting a relatively bullish thesis on gold:</span><br />
<span style="font-family: "verdana" , sans-serif;"><br /></span>
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjnafB9o3j35hzvOeS32EkWXakHh2Rbfp96XYg919yP9IFA_9G8W-dBUrIg87tqFdIgrngbjDJorKf9Idf-XzbIoykv94rYpbAnxm-OV0EYjJpOnF-k9_7wHh5ePrpUMA6Uhq4dmwRvmcM/s1600/gdx+gold.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="279" data-original-width="473" height="235" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjnafB9o3j35hzvOeS32EkWXakHh2Rbfp96XYg919yP9IFA_9G8W-dBUrIg87tqFdIgrngbjDJorKf9Idf-XzbIoykv94rYpbAnxm-OV0EYjJpOnF-k9_7wHh5ePrpUMA6Uhq4dmwRvmcM/s400/gdx+gold.jpg" width="400" /></a></div>
<span style="font-family: "verdana" , sans-serif;"><br /></span>
<span style="font-family: "verdana" , sans-serif;">source: Simple Digressions</span><br />
<span style="font-family: "verdana" , sans-serif;"><br /></span>
<span style="font-family: "verdana" , sans-serif;">As the chart above shows, since late March 2018 the ratio has been in its upward trend. Interestingly, this time it is a promising medium-term signal (the shares of precious metals mining companies are stronger than bullion). It looks like Mr. Market wants to tell us:</span><br />
<span style="font-family: "verdana" , sans-serif;">"Not everything is that bad with precious metals as it looks"</span><br />
<br />Simple Digressionshttp://www.blogger.com/profile/10996326569422618066noreply@blogger.com3tag:blogger.com,1999:blog-546884093908579135.post-19121123348858676352018-04-23T02:41:00.003-07:002018-04-23T08:45:46.651-07:00Silver - The Big Selling Has Just Started<span style="font-family: "verdana" , sans-serif;">Gold bulls are definitely excited. As the chart below shows, most recently gold and the goldollar index got very close to their strong resistance. What is important, both instruments did it in tandem</span>:<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgT8pRVjyBnS6ehdil_-JYex1MdQN1S0L_zeGhF-3VvO3VrpyaD0i3sUQXz5pU4doienjEVEPzmDbReOk4M6fN0w_zFLIenQ4eoiWEzHEEfnPQuj2KlRPTPH_HUqI0Do54KwVAuM5lEY8s/s1600/golddollar.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="504" data-original-width="740" height="271" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgT8pRVjyBnS6ehdil_-JYex1MdQN1S0L_zeGhF-3VvO3VrpyaD0i3sUQXz5pU4doienjEVEPzmDbReOk4M6fN0w_zFLIenQ4eoiWEzHEEfnPQuj2KlRPTPH_HUqI0Do54KwVAuM5lEY8s/s400/golddollar.jpg" width="400" /></a></div>
<br />
<span style="font-family: "verdana" , sans-serif;">source: Simple Digressions</span><br />
<span style="font-family: "verdana" , sans-serif;"><br /></span>
<span style="font-family: "verdana" , sans-serif;">Additionally, a silver / gold ratio made impressive breakout supporting a bullish thesis on the precious metals market:</span><br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi9JatIX1IWIVixgMGfyhwZRezzR24T5xU-SoqAmwgA0p6GbjvCMD1kHDJrgd2xIhDJGNEr4AiBtD8Spp_WeFi0z4a-2lcHHlCmlSjwpyG5fRlvPHsG_ROy5JPk6owchlzy7rGSw_3qrEo/s1600/silver+gold.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="341" data-original-width="540" height="252" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi9JatIX1IWIVixgMGfyhwZRezzR24T5xU-SoqAmwgA0p6GbjvCMD1kHDJrgd2xIhDJGNEr4AiBtD8Spp_WeFi0z4a-2lcHHlCmlSjwpyG5fRlvPHsG_ROy5JPk6owchlzy7rGSw_3qrEo/s400/silver+gold.jpg" width="400" /></a></div>
<span style="font-family: "verdana" , sans-serif;">source: Simple Digressions</span><br />
<span style="font-family: "verdana" , sans-serif;"><br /></span>
<span style="font-family: "verdana" , sans-serif;">However, my advise is simple: do not even touch this market. In my opinion, a prudent speculator should stay away from gold in particular. Why? Well, in the long term there is no pivotal change here - gold still cannot break above its resistance at $1,350 - $1,375 per ounce and each short-term upswing is followed by a counter-action. In other words, in the long-term we see the same old story (consolidation period) and in the short-term the game is quite primitive: buy gold when it is 2% - 3% down from the recent ultra-short-term top and sell when it hits the $1,350 - $1,375 zone.</span><br />
<span style="font-family: "verdana" , sans-serif;"><br /></span>
<span style="font-family: "verdana" , sans-serif;">Last thing - a few days ago JP Morgan started its typical game. After a long period of silver accumulation the bank (or, better said, somebody storing silver in the JP Morgan warehouse at the COMEX) started selling silver bullion. This game is also very simple - the excited silver bulls started buying silver bullion en masse and higher demand was met with appropriate supply. As a result, in just four days the bank withdrew 3.0 million ounces of silver from its warehouse:</span><br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj-7LWUg9aAmdamhtkEGeNAVHkuowvWopGySg4FOCHNTrOr_PNM_dj31F-t3ekxWJ6u7aoE36IXyyUtAU0Qjl5868itE6Yv17zvgrpAqsUl9pc2t5cmMZzOm6xe2XcgUF3ClMEz07VY0eg/s1600/jp.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="435" data-original-width="679" height="256" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj-7LWUg9aAmdamhtkEGeNAVHkuowvWopGySg4FOCHNTrOr_PNM_dj31F-t3ekxWJ6u7aoE36IXyyUtAU0Qjl5868itE6Yv17zvgrpAqsUl9pc2t5cmMZzOm6xe2XcgUF3ClMEz07VY0eg/s400/jp.jpg" width="400" /></a></div>
<span style="font-family: "verdana" , sans-serif;">source: Simple Digressions</span><br />
<span style="font-family: "verdana" , sans-serif;"><br /></span>
<span style="font-family: "verdana" , sans-serif;">In other words, silver bulls should keep in mind that there is somebody to satisfy their hunger. What is more, he has a lot of silver...</span><br />
<br />Simple Digressionshttp://www.blogger.com/profile/10996326569422618066noreply@blogger.com0tag:blogger.com,1999:blog-546884093908579135.post-78401453038616238742018-04-11T13:49:00.004-07:002018-04-11T13:49:48.999-07:00Will the Gold Break At Last?<span style="font-family: Verdana, sans-serif;">Today gold was at a tiny distance from breaking above its strong resistance level but...it failed.</span><br />
<span style="font-family: Verdana, sans-serif;"></span><br />
<span style="font-family: Verdana, sans-serif;">However, the current move still looks good:</span><br />
<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgHwaFJu5s-meOMh0jMurhbLGDybEmAbkES_fj3NGXZoGAJh5bAmAldXqHdDrEPbQ_vr7b-Ma8BAnR92mFk5dRlueNWLzT2QrFMCfGzZqujzPv1oIqIUaxqbur_mhSgEhEkiPzJm7nufFI/s1600/obraz.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="511" data-original-width="745" height="219" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgHwaFJu5s-meOMh0jMurhbLGDybEmAbkES_fj3NGXZoGAJh5bAmAldXqHdDrEPbQ_vr7b-Ma8BAnR92mFk5dRlueNWLzT2QrFMCfGzZqujzPv1oIqIUaxqbur_mhSgEhEkiPzJm7nufFI/s320/obraz.jpg" width="320" /></a></div>
<div class="separator" style="clear: both; text-align: center;">
<br /></div>
<br />
<span style="font-family: Verdana, sans-serif;">source: Simple Digressions</span><br />
<span style="font-family: Verdana;"></span><br />
<span style="font-family: Verdana;">The chart shows the goldollar index and gold prices. Note that this time both instruments go in tandem, which validates the current move in gold prices. </span><br />
<span style="font-family: Verdana;"></span><br />
<span style="font-family: Verdana;"></span>Simple Digressionshttp://www.blogger.com/profile/10996326569422618066noreply@blogger.com5tag:blogger.com,1999:blog-546884093908579135.post-23577289764199865042018-04-05T03:18:00.003-07:002018-04-05T03:18:31.846-07:00Note To The Subscribers - The Fourth Issue Of Newsletter Has Been Dispatched<span style="font-family: "verdana" , sans-serif;">The fourth issue of the Simple Digressions Newsletter has been dispatched. Please, find it enclosed in your e-mail boxes.</span><br /><span style="font-family: "verdana" , sans-serif;"></span><br />Simple Digressionshttp://www.blogger.com/profile/10996326569422618066noreply@blogger.com0tag:blogger.com,1999:blog-546884093908579135.post-35552902390121682262018-03-29T14:13:00.000-07:002018-03-29T14:13:00.332-07:00And They Are Still Hoarding Silver<span style="font-family: Verdana, sans-serif;">This year, up to now, JP Morgan has hoarded as many as 20.4 million ounces of silver in its COMEX warehouse:</span><br />
<span style="font-family: Verdana, sans-serif;"></span><br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiSROvcxVUDqxEOUkoD8ddrPmo5sFwPH_fJOQrSjq_9d23eTCUQZnflsrAcdqLz0JZNUrdQffz93AZBP-vhyUNh8aWQiAm4Bx1iBxa8mMmrJWP2U77s8hU35aQNiyWa3Ht3_15s0wyiSCM/s1600/jpm.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><span style="font-family: Verdana, sans-serif;"><img border="0" data-original-height="320" data-original-width="577" height="221" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiSROvcxVUDqxEOUkoD8ddrPmo5sFwPH_fJOQrSjq_9d23eTCUQZnflsrAcdqLz0JZNUrdQffz93AZBP-vhyUNh8aWQiAm4Bx1iBxa8mMmrJWP2U77s8hU35aQNiyWa3Ht3_15s0wyiSCM/s400/jpm.jpg" width="400" /></span></a></div>
<span style="font-family: Verdana, sans-serif;"></span><br />
<span style="font-family: Verdana, sans-serif;">source: Simple Digressions</span><br />
<span style="font-family: Verdana, sans-serif;"></span><br />
<span style="font-family: Verdana, sans-serif;">Interestingly, the JPM warehouse has been reporting higher silver stocks since 2015 (no matter at what price the silver was trading). If they continue hoarding silver at the same pace as in 1Q 2018, at the end of 2018 they would have had around 200 million ounces of silver (now there are 140 million ounces at JPM warehouse).</span><br />
<span style="font-family: Verdana, sans-serif;"></span><br />
<span style="font-family: Verdana, sans-serif;">For better comparison, SLV, the world's largest private owner of silver bullion, holds 318 milion ounces of silver now (JPM Morgan also has its silver stake there). </span><br />
<span style="font-family: Verdana, sans-serif;"></span><br />
<span style="font-family: Verdana, sans-serif;">Well, it is a lot of silver (global annual mine production is around 900 million ounces) so the question is:</span><br />
<span style="font-family: Verdana, sans-serif;"><strong>Why are they doing it?</strong></span>Simple Digressionshttp://www.blogger.com/profile/10996326569422618066noreply@blogger.com0tag:blogger.com,1999:blog-546884093908579135.post-74175777997005873392018-03-28T14:40:00.003-07:002018-03-28T14:43:18.146-07:00What I Am Looking At While Waiting For A Major Breakout In Precious Metals (Or For Godot*...)<span style="font-family: "verdana" , sans-serif;">In my opinion, there is a good chance that precious metals will finally break above the latest cyclical tops established in July / August 2016. </span><br />
<span style="font-family: "verdana" , sans-serif;"></span><br />
<span style="font-family: "verdana" , sans-serif;">However, to do it, gold has to be stronger than the US dollar using an absolute measure. Or, in other words, applying the concept of the goldollar <a href="http://prostedywagacje.blogspot.com/2016/06/gold-dollar-index-says-that-gold-was.html" target="_blank">index</a>:</span><br />
<span style="font-family: "verdana";"></span><br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgM-csp8AZR7HIuYNe1_pc0i1y6yo_dxTqHsbCm1rl4Cisu0MeYSZjGBtrGwgYGFB3zGalUCXhLgHqugaeRvEkGbbf0B6YbfGm7uuXzJuG4ohTkCXnMBggQV36F82jmSx0hNlxMbc7ReQ4/s1600/golddollar.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="440" data-original-width="712" height="246" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgM-csp8AZR7HIuYNe1_pc0i1y6yo_dxTqHsbCm1rl4Cisu0MeYSZjGBtrGwgYGFB3zGalUCXhLgHqugaeRvEkGbbf0B6YbfGm7uuXzJuG4ohTkCXnMBggQV36F82jmSx0hNlxMbc7ReQ4/s400/golddollar.jpg" width="400" /></a></div>
<span style="font-family: "verdana";"></span><br />
<span style="font-family: "verdana";">source: Simple Digressions</span><br />
<span style="font-family: "verdana";"></span><br />
<span style="font-family: "verdana";">As the chart shows, most recently gold and the goldollar index have bounced off their strong resistance (two horizontal lines and blue arrows). In my opinion, a major breakout will be only valid when both instruments break above their resistance at the same time (more or less). It means that a prudent speculator should closely watch the way gold and the goldollar index perform. </span><br />
<span style="font-family: "verdana";"></span><br />
<span style="font-family: "verdana";">As always, the devils is in the details but at this point the issue is quite simple. As long as gold and the goldollar index do not break together - be careful.</span><br />
<span style="font-family: Verdana;"></span><br />
<span style="font-family: Verdana;">* - "Waiting for Godot" - a play by Samuel Beckett</span>Simple Digressionshttp://www.blogger.com/profile/10996326569422618066noreply@blogger.com0tag:blogger.com,1999:blog-546884093908579135.post-89593485888159289162018-03-11T07:50:00.001-07:002018-03-11T07:50:51.410-07:00Is It The Best Time For Commodity Investing?<span style="font-family: Verdana, sans-serif;">In the long-term investing one has to keep in mind a typical sequence:</span><br />
<br />
<span style="font-family: Verdana, sans-serif;"><em>During economic expansion the first asset class to top are treasuries. Then the stocks are topping and, finally, commodities.</em> </span><br />
<span style="font-family: Verdana, sans-serif;"></span><br />
<span style="font-family: Verdana, sans-serif;">Look at the chart below:</span><br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiWCuf4ewL1P5iXmhwjPL989A_LM8_mSJBuCSU3YFbL0rTtFZLT6GMq9aAK1-Vnc_B2HXX_Vp40n2z5iABhWbJJbtEcVSRtKo8DJp1CDeqCt-kloP48A0lYnITvgUkowflYygv4y_CIkbE/s1600/sekw.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="501" data-original-width="674" height="296" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiWCuf4ewL1P5iXmhwjPL989A_LM8_mSJBuCSU3YFbL0rTtFZLT6GMq9aAK1-Vnc_B2HXX_Vp40n2z5iABhWbJJbtEcVSRtKo8DJp1CDeqCt-kloP48A0lYnITvgUkowflYygv4y_CIkbE/s400/sekw.jpg" width="400" /></a></div>
<br />
<span style="font-family: Verdana, sans-serif;">source: Stockcharts.com</span><br />
<span style="font-family: Verdana, sans-serif;"></span><br />
<span style="font-family: Verdana, sans-serif;">The chart shows this rule in practise. If I am correct, treasuries had topped in 2016 (blue circle). The stocks are probably topping now (the green circle), even despite the latest all-time high made by Nasdaq 100.</span><br />
<span style="font-family: Verdana, sans-serif;"></span><br />
<span style="font-family: Verdana, sans-serif;">Finally, commodities, represented by the CRB index (unfortunately this index is overweighted by oil), are breaking above the long-term resistance level at 195 (the red circle).</span><br />
<span style="font-family: Verdana;"></span><br />
<span style="font-family: Verdana;">Summarizing - if I am correct, now there is time for commodity investing...</span>Simple Digressionshttp://www.blogger.com/profile/10996326569422618066noreply@blogger.com0tag:blogger.com,1999:blog-546884093908579135.post-83587505758960530342018-03-09T08:55:00.002-08:002018-03-09T08:57:52.920-08:00Prepare For A Major Breakout In Precious Metals<span style="font-family: "verdana" , sans-serif;">It looks like we are ahead of a major breakout in precious metals. Look at the chart below:</span><br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgPdarG1FidcYcku5W0Eu-sKjxTVo-XEE2ixOFAnEMj-L47bSGLAtlNx2qZmUko59JNdoc-aGGfhSXN-cixkzAd42HgHpY5OA3W88DtOUJBt9h9c-EpZw2yBWVb49toYE0mxpwHjexhkok/s1600/silve+gold.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="500" data-original-width="675" height="296" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgPdarG1FidcYcku5W0Eu-sKjxTVo-XEE2ixOFAnEMj-L47bSGLAtlNx2qZmUko59JNdoc-aGGfhSXN-cixkzAd42HgHpY5OA3W88DtOUJBt9h9c-EpZw2yBWVb49toYE0mxpwHjexhkok/s400/silve+gold.jpg" width="400" /></a></div>
<br />
<span style="font-family: "verdana" , sans-serif;"> source: Stockcharts.com</span><br />
<span style="font-family: "verdana" , sans-serif;"></span><br />
<span style="font-family: "verdana" , sans-serif;">The chart shows a popular precious metals performance measure - a silver / gold ratio. As you surely know, gold and silver prices go in tandem but silver overperforms gold during a bull market and under-performs during a bear market in precious metals.</span><br />
<span style="font-family: "verdana" , sans-serif;"></span><br />
<span style="font-family: "verdana" , sans-serif;">That is a theory. In practise, very often the ratio is a lagging indicator. For example, in the beginning of this bull market in gold (no, I am not kidding - in my opinion, we are still in a bull market in precious metals) the silver / gold ratio was going down (January - March 2016). Then it followed the rule and went up.</span><br />
<span style="font-family: "verdana" , sans-serif;"></span><br />
<span style="font-family: "verdana" , sans-serif;">Interestingly, in July 2016 the ratio printed its cyclical top and since then it has been going down sending us a message that not everything was good with the precious metals market. And yes, since July 2016 gold was not able to break above the latest cyclical top at $1,350 - $1,375 per ounce.</span><br />
<span style="font-family: "verdana" , sans-serif;"></span><br />
<span style="font-family: "verdana" , sans-serif;">These days the ratio is once again very close to its multi-year bottoms (red and blue circles on the lower panel of the chart). However, the latest bottoms (red circles) were established when gold prices were very close to their bottoms as well. </span><br />
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<span style="font-family: "verdana" , sans-serif;">This time (the blue circles) the ratio is at one of its lowest levels but gold is not. </span><br />
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<span style="font-family: "verdana" , sans-serif;">In my opinion, very soon the ratio should start another move up (if history repeats). It means that gold should follow the ratio but this time the move in gold should start from the current level ($1,330 an ounce). </span><br />
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<span style="font-family: "verdana" , sans-serif;">If I am correct (and lucky), we should see a major breakout in gold (and silver ) prices soon.</span> Simple Digressionshttp://www.blogger.com/profile/10996326569422618066noreply@blogger.com0