Absence makes the heart grow fonder!
Hey! Its great to be back among friends. I’ve been doing other things for a few months, but now seems like a great time to talk about silver again. If history rhymes for the rest of this year, the Silver Sidestep looks like a fantastic opportunity!
What the heck is a Silver Sidestep?!
My fellow Texans will be happy to hear that the Silver Sidestep is not another dance craze like the Texas two step. The Silver Sidestep is a way of viewing a chart pattern that presents a great opportunity for making excellent profits in silver. Before I show the chart, consider the last four years of silver action as summarized in the table below:
Capture Huge Profits
87% ($4.43 - $8.28)
129% ($6.64 - $15.20)
Summer 2007 ???
Summer 2007 ???
150% ($12??? - $30???)
Spring 2008 ???
Summer 2009 ???
An odd coincidence?
Admittedly, my table has only a few data points. Readers will be forgiven for being cautious about forecasting future investment actions based on what may prove to be little more than a coincidence. An interesting point, however, is that it is an odd pattern, as in the odd years of 2003, 2005, and quite possibly 2007 and 2009. Another interesting point is that the table corresponds quite closely to the multi year silver seasonals which show (approximately) silver bottoming in the summer and then rising through the winter.
My commentary A Sure Thing Silver Cycle looked at silver from an annual cycle perspective, and it correctly suggested caution in December 2006. The Silver Sidestep viewpoint discussed here is different in that it views the silver market as working in two year cycles. If that viewpoint is correct, then we are in the right timeframe for a great buying opportunity.
Up, Down, and Sidestep on the weekly chart
Consider the 5 year silver chart with weekly bars below. It highlights the 2003 and 2005 silver bull waves by drawing a green line from each wave’s low to its high. In the spring of 2004 and 2006, silver had a sharp and painful sell off that punctuated the end of each bull wave. After the blood stopped flowing from the falling knives of the immediate silver sell off, silver then went essentially nowhere for more than a year. I call that “nowhere” the Silver Sidestep, and my chart shows it in a colored box. At the end of the Silver Sidestep, which was in the summer of an odd year, silver began a rapid rise into a new and explosive bull wave. If that pattern persists in 2007, then silver is poised to launch into another explosive thrust higher. Take a look at the chart below.