Monday, May 9, 2011

Silver's coming Moves

Silver will remain parabolic on a long term basis.  Stand back and think about what a ten year parabolic move in silver could mean.  If it rises parabolically, the pullbacks, even if they are huge, may not be apparent, because they will happen quickly.  Volatility will hide the short term moves beneath the long term trend.

Silver will average at a 4% clip while it moves back to its nominal high of $50.  It will see moves of 3.5% on back to back days, with then a 3% pullback.  Come the $46 mark there will be a move up to $50, with another large selloff.  This will likely happen two times other than the last, with each sell off being less than the previous.  Once $50 hits, the pullback should move to $42.  Then $50 will be tested again with a pullback to around $46.  The market makers will protect $50 for as long as possible.

The market can only test $50 so many times before it breaks, and once it does, it is on to another level.  Like I just wrote, $50 will likely be tested and sold twice more, as three is the major number when it comes to tested resistance levels.  On a long term, ten year chart, these pullbacks will not be noticeable,  even though volatility will remain high until silver is recognized as monie.  This will either be when a Central Bank moves assets into silver officially, or when a major exchange defaults on physical and tries to paper over delivery.


  1. Mr. Lennon: what are your projections for silver by the end of May, summer: (June, July, August, Sept) and end of the year? you see a big correction by summer like the one we just saw?, what do you think about Armstrong turn dates: May 23 and June 13?...I really appreciate your insight and hard work here in your blog, thanks sir.

  2. I have two long term theories:

    a) SHTF any day. This theory has the SHTF right after QE "3", whilest the Bohemians are safe in there Grove.

    b) This all continues for around two more years or so.

    If SHTF, silver becomes a currencie; it is realized as a medium of exchange. If this last two years, I see silver breaking out of $50 and moving to $80 by September, whereas this fall it makes a run to $150 by the winter solstice. Silver has a pullback next winter to $120 or so before continuing to $250 by summer, where it remains under $300, before finally, the following fall, finishing the parabolic moves to around $500 by December 21st, 2012.

    The reasons....summer is mining time, and supply increases. January and February afford the shorts an opportunity to short because the price historically gets run up in December.

    Thanks for the compliment, and I hope that helps!

  3. I'm not sure that I agree with your comment about mining in summer being easier and hence additional production = lower mineral prices from June to Sept.
    Much of today's production is coming out places like Africa, south/central America and southern Asia. Ain't winter there! In fact, in some places, it's the rainy season and extraction and delivery is even tougher!

  4. World Production by Hemisphere is even 1:1.

    The world's gold miners are US/European owned and this cartel uses accounting gimmicks to front load production levels to suit their agenda. Increasing supply on their books gives them a better leverage point come fall, and fall and into December is when gold demand soars. Look at what happened when ABX lifted their hedge book in the Fall of '09: supply increased so dramatically that gold dropped tremendously.

    Their books function like a bank's, and they can move the gold from asset and reserve, to liability however they choose. They can liquidate their reserves whenever they want, and they can report however they see fit. Summer is on their watch, and historically, the price drops in the summer due to a rise in production, whether this is an actualized amount during those months or not.

  5. Mr. Lennon,

    I hope you are right!! I come to your blog often....thanks for your efforts.


  6. Mr. Lennon, I think I read a post of you on ZeroHedge about Silver touching $50 at least two more times, each time with smaller corrections; $35-$36, and $40-$42...before the big run to $80-$100?, assuming your second scenario?, why do you have Dec 21, 2012 for Silver to reach $500, any extra reasons?, thanks a lot mate.

  7. I did write that. I wrote that during the big run up. I wrote that because all asset classes always correct, and silver being the most volatile (because it is heavily manipulated) sees many corrections. Over the last two and one half years it has become less manipulated, as more investors pile into physical, but due to the "m"arket "m"akers ability to paper over the market, it is still. But along the way, it will become less so. This is why certain prices will be broken and for good.

    Nominal price is trivial, we must look for how an asset will trade on a parabolic blowoff. When price moves up dramatically, its down moves can almost match it, and the graph on a long term basis can remain parabolic. For example, when this recent move is looked back on (assuming I am right about the Next Move) a down move from $49 to $36 will hardly be noticeable on a ten year graph that finishes with silver at $2500 an ounce.

    I have $500 on that date because I am assuming the percent increase will remain high, even when discounting pullbacks. I have assumed that summer and winter (notice "summer" and "winter") price will remain flat compared to spring and fall. Using the last two years as the metric, silver has gone from $8.88 (what a number) to $49. Using that same percent, the price will be $250...but then I account fiat debasement, defaulting exchanges, and more investment into PMs. So $500....