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For market insights many investors focus on the
“historical/backward” looking news but fail to realize other
exceptionally powerful forces that are also at work; such as “Seasonal
Trends”. We believe there is some validity to paying attention to
the News events that can impact ones investments; however seasonal factors
may provide a simpler and more reliable market insight.
To keep things simple we will first display a few
charts and then discuss what they may be indicating:
 
When we look at the red line in the above chart we
can see that the price of silver usually performs strongly from about
November to April. Around this time of year we typically see the price
of silver pushing higher and higher with relatively small corrections.
In this gold chart we can see a similar result to
silver. In the typically strong month of November we are seeing gold
price performance that is “weak” instead of
“strong”. This summer (not shown in the chart above)
when one would expect the price of gold to correct, it remained very strong
and it really didn’t have any kind of a “pull back” until
September.
Here we see the US Dollar illustrating unusual price
strength instead of typical seasonal weakness. Because precious metals
and other markets are “priced” in US dollars, when the US dollar
heads up, the” price” of the asset it is measuring tends to fall.
So what does all of this mean? To be clear we
are extremely bullish on the price of silver and gold in the big
picture. We believe that both silver and gold will eventually advance
into a full fledged bubble market that will surpass
most investor’s wildest dreams. However, in the short term
unusual market action is usually a “warning sign” more than it is
a “green light” to load up on new positions. Although we
believe seasonal trends are a very powerful force and the metals may very
well be higher in February than they are here in November, the unusual price
action does raise the caution flags that perhaps something a little different
is brewing this year. It has been a long time since silver, gold and
commodities in general have had a very meaningful correction. There are
a lot of warning signs in the markets these days and at this time it may make
sense to proceed with caution.
Ultimately we expect to make our largest profits
from the huge macro moves in the markets. At investmentscore.com we try
to identify long term macro trends such as the current silver bull market,
identify intermediate term entry points and watch for our ultimate exit
point. We not only want to identify and profit from the coming bubble
market, we also want to keep our profits for the next low risk
opportunity. To read more free commentaries or to sign up for our free
or paid newsletter please visit us a www.investmentscore.com.
Michael Kilbach
Editor
Investmentscore.com
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