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J.P. Morgan vs. Silver: so Far – go Gold

By: Makrocheck



-- Posted 5 December, 2010 | | Discuss This Article - Comments:

2010 seems over already:

Gold had a “remarkable” rise of some +30% since the beginning of this new decade.

Silver even had a “sensational” year rising some +70%, which equals to silver outperforming gold 2.3-fold: so far - so good.

 

Accordingly, the Gold-Silver-Ratio experienced a “crash-like” performance in 2010 that can be explained with a thrust to the downside out of the (darkblue) triangle that formed between 2008-2010 - which is actually supposed to be a thrust to the upside out of the (lightblue) triangle that was built between the beginning of this century & 2008. However, it will be considered as a thrust to the downside (out of the lightblue) triangle, as soon as the thrust to the downside (out of the darkblue triangle) is trading beneath the triangle-apex of the (lightblue) triangle at approx. 46. Hence, gold is expected to perform better than silver now until this potential event occurs - as the price-level of the apex represents strong hold.


 

On December 2nd, Max Keiser stated at the Guardian.co.uk in his readworthy article “Want JP Morgan to crash? Buy silver” that this investment bank currently (?) owns & holds silver short-positions equaling to some 3.3 billion ounces equaling to some 1.5 trillion Dollar in liability - if in need to be covered.

The following longer-term perspective since 1980 shows that the Gold-Silver-Ratio predominately moves within the (green) upward-trend-channel & that since reaching the upper (green) trend-channel at approx. 90 in 2008, a correction takes place currently having arrived at the lower (green-dashed) trend-channel at 47 suggesting a rebound to start now. Only if this last support is being breached, another/confirming sell-signal for gold (against silver) is generated (i.e. silver is to be favorized relative to gold). Hence, as the ratio having arrived at this (green-dashed) support, a buy-signal for gold (against silver) has just been issued (i.e. gold is expected to perform better than silver from now on).  

Interestingly, the stock of J.P. Morgan is currently trading at the apex of the (red-green) triangle that has been forming since the mid 1990s. Despite 2 major breachings of the triangle`s lower (green) leg in 2001-2003 & 2008-2009, a breakout above the (red) leg occurred in 2009, whereafter various classical pullbacks to the triangle & its apex followed. Hence, the longer-term decision is soon being made if a thrust to the up- or downside occurs: buy-signal (à la thrust to the upside) when rising above the (red-dashed) resistance currently at approx. 45 & sell-signal (à la thrust to the downside) when breaching the (green-dashed) support currently at approx. 34.


Indicators:

RSI: buy-signal since trading above the (red-green) triangle-apex. Sell-signal when breaching the apex at approx. 40 points, or when reaching the (grey) horizontal-resistance at 79 points (buy-signal when rising above it).

MACD: buy-signal when rising above the upper (red) resistance & sell-signal when breaching the lower (green) support.

PPO: buy-signal when rising above the upper (red) resistance & sell-signal when breaching the lower (green) support.

The Gold-Silver-Ratio is analyzed constantly at the following website: http://en.makrocheck.ch/29-vs-Silber

The analysis of stocks like J.P. Morgan can be observed at the following section: http://en.makrocheck.ch/229-Banken-amp-Finanzen - however, as buy- & sell-signals are issued permanently, a “membership” is required (free of any costs & obligations): http://en.makrocheck.ch/login.php?status=1

www.makrocheck.ch

*****

Makrocheck is a diversified investment & research group based in Zurich, Switzerland, specialized in the analysis of financial markets & equities for institutional & private investors. Makrocheck (or any of its affiliates) is not liable or responsible for any loss (especially financially) that is made by readers using any of the information published by Makrocheck. Makrocheck does not guarantee the accuracy or thoroughness of the information reported.


-- Posted 5 December, 2010 | | Discuss This Article - Comments:



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