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Gloves About To Come Off In Silver?

edegrootinsights.blogspot.com
FEBRUARY 21, 2012


Accumulation by the "strong hands" during the 2011 D-wave decline was impressive. Silver's diffusion index (DI) reading of 95, second only to 97 recorded during the Great Financial Panic of 2008, reveals the strength of the accumulation (see chart 1). Yet investors appear to have forgotten that silver nearly quintupled from $10 to $40+ once the invisible hand regained control of the trend in 2008.


Where do we go from here? The A-B-C-D cycle illustrated in chart 2 says up. The panic buying begins, or what I have described in the past as the "gloves coming off" when silver breaches $37.5/oz London P.M. fixed on the monthly chart.

Chart 1: Silver London P.M Fixed and the Silver Diffusion Index (DI)


Chart 2: Silver London P.M. Fixed

 


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