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<p>[QUOTE=&quot;WingedLiberty, post: 1168165, member: 26030&quot;]I know there is a big split on this board: Half think $50 silver is a bubble and will soon pop -- the other half think $50 silver is here to stay and silver is ultimately heading higher.</p><p><br /></p><p><span style="color: red"><b>I think the top 3 arguments I&#039;ve heard for a Bubble are:</b></span></p><p><span style="color: red"><br /></span></p><p><span style="color: red">&nbsp;&nbsp;&nbsp; 1. Last time silver hit $50 in 1980 it was a bubble, just look what happened after that.</span> <span style="color: red"></span></p><p><span style="color: red">&nbsp;&nbsp;&nbsp; 2. Silver has tripled from $16 to $48 in 6 months, that&#039;s a &quot;too far, too fast&quot; climb.</span></p><p><span style="color: red">&nbsp;&nbsp;&nbsp; 3. We all got used to Silver between $4 and $8, it sat there for 20 years between 1981 and 2001, so that must be the &quot;normal, fair market&quot; price.</span></p><p><b><br /></b></p><p><b><span style="color: seagreen">I think the top 3 arguments I&#039;ve heard for the New Norm are:</span></b><span style="color: seagreen"></span></p><p><span style="color: seagreen"><br /></span></p><p><span style="color: seagreen">&nbsp;&nbsp; 1. Too Low Interest Rates and Rampant Money Printing have finally caught up with us (and Bernanke wants the dollar to go lower).</span> <span style="color: seagreen"></span></p><p><span style="color: seagreen">&nbsp;&nbsp; 2. People and Governments are diversifying away from the Dollar and buying gold and silver.</span></p><p><span style="color: seagreen">&nbsp;&nbsp; 3. The inflation adjusted 1980 price for silver is really between $128 and $328 (depending on how you measure inflation) an ounce, so there is a lot of room to run</span>.</p><p><br /></p><p>[ATTACH]121488.vB[/ATTACH]</p><p><br /></p><p>I&#039;ve started trying to analyze the situation to determine how I should position myself in my retirement investments.&nbsp; I am a firm believer in higher silver prices in the future (which I think will push over $100 an ounce in a few years)&nbsp; -- but I also think silver has run too far, too fast in the short term and needs a good pullback to build a better base for it&#039;s next run.&nbsp; I still think a pull back to $35 would be very healthy (ok so maybe we can just get down to $40 and not $35 -- that would still be healthy).</p><p><br /></p><p>I subscribe to a metals newsletter and they think silver is getting ready to top out around $50 -- but strangely they are very bullish on gold.&nbsp; This is a bit of a contradiction as silver and gold do have a clear correlation to each other and from what I&#039;ve seen (in the historical charts) it&#039;s hard for one to have a big correction without the other also correcting. </p><p><br /></p><p>Another negative for a continued silver run is how the silver mining stocks have been stuck in the mud for the past 4 months (as silver metal has exploded higher).&nbsp; The stock market is a discounting mechanism, and I think this dynamic says people that invest in stocks think silver will be much lower in 6 months.&nbsp; Whether or not this is bullish or bearish, it&#039;s not clear -- but it certainly says stock traders don&#039;t believe the recent silver and gold rally is stable.</p><p><br /></p><p>One positive for a continued silver run is I hear a lot of people getting short silver.&nbsp; I even heard of a double short silver ETF trading under ticker symbol <b>ZSL</b> that had huge volume lately.&nbsp; This actually is sort of bullish for silver prices, as when there are a lot of people short, they can get &quot;squeezed&quot; and have to cover their positions.&nbsp; This can cause silver prices to rise.</p><p><br /></p><p>From a technical analysis perspective, we could be at a double top (perhaps triple top) around $50 --- however typical tops have very fast, near explosive downward moves after reaching the top.&nbsp; So if we just sort of hang out here around $48 to $49&nbsp; for a few weeks, I think that suggests silver is <u>not</u> going to drop precipitously.&nbsp; So the longer we hang out at these prices, I think the chances of a big correction are reduced. </p><p><br /></p><p>I do think this is a very &quot;unloved&quot; rally in silver and gold.&nbsp; Most people I know don&#039;t own any silver or gold.&nbsp; Even the people long the metals have a bit of a sense of disbelief at these prices and almost appear quick to sell and get out.&nbsp; (Just look at all the people on this board that sold their silver as it climbed above $24, $28, $32, $36, $40.&nbsp; Even I dumped out of silver in my retirement accounts when it got close to $50)&nbsp; Certainly that part of it would suggest we are not at a MAJOR top.&nbsp; Since major tops happen when EVERYBODY is in and long and very bullish -- not when everybody is skittish and in a state of disbelief.</p><p><br /></p><p>So all in all, I feel confused by several conflicting dynamics -- I do think silver will go higher later this year (probably in the Sept to Nov time frame) -- but we are OVERDUE for a good correction in silver down to $40 at least (and $35 would make me feel happy).&nbsp; So between $35 and $40 -- I would go long silver again in my retirement accounts -- until then just playing a waiting game.</p><p><br /></p><p>However if silver hangs out here for a while then starts moving higher and breaks above the 1980 high of $50.36 (i think) ... all bets are off and it looks like the bull run continues.</p><p><br /></p><p>I sold a lot of my &quot;paper&quot; long silver positions in my retirement accounts with silver prices around $49.50 -- However the hoard of gold and silver coins I bought, I bought for long term, and I&#039;m not selling (even if silver drops by $25).&nbsp; &nbsp; </p><p><br /></p><p>These sure are interesting times![/QUOTE]</p><p><br /></p>

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