Though the ultimate price of the silver top was not known in advance, this was not required (as if it could be acquired!). When the RMAR reached a value of 1.30, the price run ups were at near exhaustion and ready to collapse within weeks if not days. Timing was of the essence since silver quickly ate up all the gains of the previous months.

The performance of the RMAR for the 2004 and 2006 spikes is given below.

The RMAR for 2006 actually called a sell on the first peak of a silver double top so though taking profits in long positions was the right decision, going short silver at that trigger point needed some caution because a short lived leg up was to follow. Note the requirement for careful management of stop loss positions for such leveraged plays.

So with this track record in mind, what can be anticipated for the next few months? Note from the diagram that when silver begins to move, the RMAR begins to move too. In fact, since the value is at about 1.00 just now, we compared how long the 2004 and 2006 RMAR runs took from a launch of 1.00 to a 1.30 sell. The answer was four and three months respectively for 2004 and 2006.

So, if the RMAR is going to trigger a sell signal in a similar fashion to previous spikes, we may not anticipate a top in silver until at the earliest May or June. Considering the duration of the previous bull runs, this seems in accord with past data. However, you know the old financial caveat; the past is not always an indicator of the future.

We will continue to monitor this indicator (amongst others) for subscribers and begin to marshal silver assets for sale as the sell threshold approaches.

Further analysis of silver can be had by going to our silver blog at http://silveranalyst.blogspot.com where readers can obtain a free issue of The Silver Analyst and learn about subscription details. Comments and questions are also invited via email to silveranalysis@yahoo.co.uk.