Interesting chart: SLV versus the S&P500

BATS:SLV   iShares Silver Trust
I am not making a forecast with this chart. Rather, I just want to show you where the SLV is relative to SPY in the last few years. When I look for chart opportunities, I often will look for LONGS in the trash bin where everyone has been selling and throwing out old ideas. I liken buying stocks to the popular "Thrift Shop" song by Macklemore (on SNL this weekend too).

I also like shopping for stocks in the "TRENDY" hot new products stores in the malls too. Trendy for me is technology and internet-related companies that are maximizing their business on the WWW. In the long run, the more exposure your portfolio has to INTERNET companies, the greater the chances that you will outperform the average portfolio.

This SLV chart has spent so much time going down that I'm wondering out loud if it doesn't look UGLY enough to form a bottom. The last wave down here pushed under the lows made in the final quarter of last year. Maybe this is enough to wipe out any enthusiasm and provide a setup for a rally. The amount of American Eagle silver coin buying in January by investors was epic in size, big enough for the history books, and yet here we are under the lows of all of that buying. There is either a flood of secret supply out in the market to keep the price down in order to redirect money into PRODUCTIVE assets, or we are just taking part in a Sisyphean task where we push a rock up a hill and let it roll down the hill for the rest of our lives. Excuse my sarcasm, but I do believe the long term demand trend in silver is up for commercial applications. It will just take time for that demand to lift the price back up to its heights from two years ago.

I do view the one month (22-days) highs and lows as decent trading bands for SLV . Generally it is a good idea to buy when the price is making 22-day LOWS and exit when the price is up to a 22-day high. The next time frame I would recommend is 63-days. Buy when prices are making a 63-day low and exit on a 63-day high.

Cheers to all. I look forward to a profitable 2013 with you.

Tim 8:24AM EST Monday, March 4, 2013

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