Tuesday, May 21, 2019

Silver Appears Headed For 10-Year Lows

This decline seems inexorable and destined to simply exhaust the longs. We've noted the effects extended declines can have on traders:
The old timers used to get very somber when talking about the 1973-1974 equity bear market.
The thing, they said, was that it just kept grinding lower and lower, for 694 days.

By comparison the 2007-2009 decline lasted 517 days, though deeper at a 54% drop in the DJIA versus 45% (43% on a closing basis) for the index in the earlier bear.
On the London Exchange the 73-74 collapse was 73% in the FT 30 and 68.5% for the wider market.

But then there was the inflation. 
British inflation rose 10.6% in 1973 and 19.1% in 1974. And although lower, the comparable figures for the U.S. were the same order of magnitude, 8.7% and 12.3%. 
The inflation adjusted declines were thus just that much worse and among the worst real returns in history—excluding of course the Berlin Stock Exchange up to 1945 and the FX market for the shekel/denarius cross in the year 70, what with the destruction of Jerusalem and the Temple and all....
From FinViz:

The double bottom in December 2015 and 2018 was $13.90. Currently $14.37, 47 cents away.
It's Seligman's Learned Helplessness:
Learned helplessness is behaviour that occurs when the subject endures repeatedly painful or otherwise aversive stimuli which it is unable to escape from or avoid. After such experiences, the organism often learns to accept the painful stimulus and does not even try to "escape" or "avoid" it, when it would have been possible to do so. In other words, the organism learned that it is helpless. In situations where there is a presence of aversive stimuli, it has accepted that it has lost control and thus gives up trying, even as changing circumstances offer a method of relief from said stimuli....
From Kitco, May 21:
Gold Struggles; Silver Makes Another Low
If you want to know what ugly is, look at a chart of silver since the end of January. Silver continues to go down almost every day without even the occasional dead-cat bounce. Since hitting $16, silver has fallen; the pattern looks like we should be downhill skiing. Only the shorts are enjoying this run.
Gold has had a similar run to the downside but not as bad as silver. Gold should continue to work its way lower and for now there is no reason to buy. Gold looks headed to $1,240. There doesn’t appear to be any reprieve, although of course markets can change at any time. The odds favor the current trend, which is down. We see no reason to fight and will stay short....MORE
May 1
Silver Is Now Just 82 Cents Above Its Multi-Year Low
April 18
Ummm, Either Silver Is Setting Up A Giant Cup-and-Handle Chart Pattern Or...
...or it is bound and determined to revisit the ~$13.90 multi-year low we saw in 2018 and December 2015.

I know, anthropomorphizing an inanimate object. Trust me I know....