The United States has been in Bankruptcy since 1933. The Bankers took control of our money in 1913 and 30 years later we were broke. Roosevelt then took the Gold as collateral on a new kind of money (not real) called the FRN. At this time our labor was also pledged as collateral on this new monetary instrument. This is done via the SSN and the Birth Certificate. Again, both VOLUNTARY. You choose
That's not too shabby, but there is an even better way to trade precious metals, which I will get to in a moment. First, let's go over how I came by that calculation for silver.
Silver usually moves with gold prices because both are viewed as inflation hedges. The relationship between the two metals can be captured with the gold/silver price ratio, which measures the ounces of silver one ounce of gold will buy. During the 1900s, the average ratio was 47, meaning that one ounce of gold would buy 47 ounces of silver.
If gold reaches $2,000 an ounce, silver should move to about $42.55 an ounce ($2,000/47 ounces = $42.55 per ounce). That would be a 57% gain in silver from the $27.17 close on July 12. The chart pattern of silver supports this price target and also shows that silver is looking for a bottom.
As you can see below, silver has been forming a triangle pattern with support near $27 an ounce becoming clear in the past four weeks. Relative strength (RS) has been forming a bullish divergence during the past three months, moving up as the price declined. And volatility has been contracting since the beginning of the year. Taken together, these indicators show that a sharp rally in silver should start any day. The triangle supports a price target of $42.50 when measuring from the March high to the support level.
Miners could see even bigger gains. Mining companies offer a leveraged return on price moves. If a company's mining cost is $10 an ounce, it would earn $17.17 an ounce at current prices. Assuming production costs remain constant, the profit increases to $32.55 an ounce at the target price, a 90% gain on the 57% jump in silver prices. While this is an oversimplification as miners have other costs that factor into their net profits, this math shows why miners are a good trade when metal prices are moving higher.
Focusing on miners, Hecla Mining (NYSE: HL) jumps to the top of my buy list. It has the highest RS among the components of the Global X Silver Miners ETF (NYSE: SIL), and recently has been outperforming almost every available stock and ETF.
HL has pulled back after gaining more than 34% in eight weeks. Traders who buy this pullback could enjoy a potential gain of 15% in the short term. There is some resistance at $5.01, but a break above that level completes a cup-and-handle pattern, which has a target of $6.28 for a potential gain of 44%.
HL is a trade that could become a core long-term holding since the company also has solid fundamentals. Hecla is the largest silver miner in the United States, and is pulling about 10 million ounces of silver a year out of its mines at a cash cost of only $2.24 an ounce. This makes HL the lowest cost miner in the country and positions the stock to enjoy the biggest gains in a silver bull market. Value stock pickers should also appreciate the price-to-earnings (P/E) ratio of 11 and the dividend yield of 2%.
After seeing apple peak in April the stock has finally taken a breather and went through a six month consolidation. After breaking above $430 it never really looked back and the stock gained 50% in a mere three months. It looks like the stock can be entering its third wave in a long term bullish trend. A few important points to consider:
- Fundamentally Apple is not a “high-flying” tech stock with ridiculous multiples
- Currently trading at roughly 15 P/E it is hard for anyone to justify it being anything other than cheap.
- Technically the stock is exhibiting many bullish technical signals
- Strong break out in early July of consolidation with increased volume despite typical low volume summer trading.
- Outperformance of the Nasdaq and S&P
- Apple appears to be entering bullish 3rd wave upwards in a typical 5 wave pattern
- Apple makes up roughly 20% of the weight of the Nasdaq, so while you may not always be interested in trading directly in Apple, it is prudent to keep an eye on its general direction.
Back in March and April the optimism got a little too high and we saw price pullback. This is very natural and healthy; it would have been irrational to want to get in after a 50% move in three months. However, we have now seen price consolidate and Apple disappear from the hourly headlines. This is exactly the opportunity we like, and all signs point up for Apple.
Apple Stock Trading Idea
Youku Inc. operates as an Internet television company in the People's Republic of China. Its Internet television platform enables consumers to search, view, and share video content across various devices. The company's services for users comprise online video content library consisting primarily of professionally produced content, including television serial dramas, movies, current event reports, variety shows, and music videos. It also provides guided user-generated content through Youku Paike and Youku Niuren programs; and produces a range of content, such as reality shows, interviews, and variety shows under Youku Originals brand. The company offers online advertising services to various advertising companies operating in fast moving consumer goods, information technology services, automobile manufacturing, electronics, telecommunications, financial services, e-commerce, and online game industries. The company's products and services for advertisers and customers comprise online advertising services, such as in-video, display, sponsorship, and other forms of advertisements. Youku Inc. sells its products and services at youku.com.
To analyze Youku's stock for potential trading opportunities, please take a look at the 1-year chart of YOKU (Youko, Inc.) below with my added notations:
The main price level to watch on YOKU is $20. Not only can you see the $20 support (navy) from January until July, but $20 was also resistance back in December. In addition to the $20 level, there is also a potential level of support at $15 (red) if the stock should fall there and a higher level of resistance at $25 (green).
The Tale of the Tape: Now that YOKU has broken below $20, the stock should continue lower overall. A short position could be placed on a rally back up to the $20 resistance, or a long play could be made on a break above $20 if that should happen.
This fall is due to fears of a European depression... and an economic slowdown in China.
To stay in the game for a long time – and to win the game – speculators have to stay aware of risk. We have to focus on avoiding it. Only by focusing on risks can we set ourselves up for rewards.
That's why we devote half our mental energy to watching for risks like a major China slowdown... And it's why we're concerned about Caterpillar's recent plunge.
We don't know if things will get "bad" in China. We can't predict the future. But we can point to Caterpillar's 2011 low of $70 per share and call it a "line in the sand."
If Caterpillar breaches that level, it's a sign the world is experiencing an extreme slowdown... And it's time to "batten down" the hatches on your portfolio by holding plenty of cash... some gold... and only the world's safest and best businesses.
