Trading the Paradigm

I always say that if you want to invest find the hedge between a declining issue and a rising one and buy the rising one. If you want to hedge your risks – buy the low and sell the high. If you want to trade – either buy the low or sell the high whichever is more momentum driven.

I like the Gold/Dow ratio. Its long-term, promising and easy to understand. Or better yet, let’s use Silver.

Simply, with the Dow at 11,750 and Silver at 14.50, let’s analyze your odds (with a 18-24 month range):

High Low
DJIA 16,000 8,000
Silver 25 12

Notice how I am offering extreme figures for both, but we discuss possibility.

Thus, the DJIA 28% off possible highs and 47% off lows. Silver is 78% off its highs and only 17% above its possible lows! I’d reckon that the odds stand squarely in favor of higher silver.

I speculate that the commercial shorts – manipulators of the sell-off or not – will grab this opportunity to cover their positions, possibly for the last time. After all, how many more technical funds can they liquidate before hundreds more buy in? It will be an opportunity for many years rewarded.

Sell your shorts and buy as much silver and gold as you can. We are reaching a point of desperation as are the sellers of such commodities.

As we continue to declare: Buy until your hands bleed!


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