So What About Silver?

blog.milesfranklin.com / By Bill Holter / February 18th, 2014
I wrote a piece yesterday showing you how the moving averages for both the HUI and gold look to be bottoming and crossing over from very oversold levels.  I got to thinking, what about silver?  I figured in the back of my mind that because silver has underperformed gold and has generally seemed to only “bottom bounce” more that its progress was behind that of gold.
I again tapped my buddy Dan Norcini and asked him what silver looked like?  This is what he sent me!
Silver is exactly where it should be given that historically the shares lead, followed by silver and then gold.  Silver’s MACD’s are not “touching” yet but they are VERY close, much closer than gold’s to crossing over.  I do want to point out that we have “round tripped” back to the $18-$20 levels that was seen in previous years as resistance.  We basically hit this resistance level 3 times prior to the 2011 run up.  Once broken out however, silver ran to $30 in 6 or 7 months.
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Walter Energy, Inc. (NYSE: WLT)

Walter Energy, Inc. produces and exports metallurgical coal for the steel industry. It also produces thermal and industrial coal, anthracite, metallurgical coke, coal bed methane gas, and other related products. The company offers its thermal coal for electric utilities and industrial customers. Walter Energy, Inc. exports its metallurgical coal to Europe, Asia, and South America; and markets its thermal coal primarily in the United States. The company was formerly known as Walter Industries, Inc. and changed its name to Walter Energy, Inc. in April 2009. Walter Energy, Inc. was founded in 1946 and is headquartered in Birmingham, Alabama.
Please take a look at the 9-month chart of WLT (Walter Energy, Inc.) below with my added notations:

WLT found support at $10 (blue) twice back in June and August. The stock then managed to rally up to a high of almost $20. Now the stock has approached $10 again and that might provide another bounce higher. However, the stock’s recent lagging of the overall market could be setting the stock up for a breakdown.

The Tale of the Tape: WLT has a key level of support at $10. A trader could enter a long position at $10 with a stop placed under the level. If the stock were to break below the support, a short position would be recommended instead.
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Is A COMEX Default & Gold Surge Coming?

kingworldnews.com / February 17, 2014
Today a 42-year market veteran who predicted the spike in gold ahead of time spoke with King World Newsabout the explosive action in gold.  Now that the rally he predicted is unfolding, John Hathaway, who is one of the most respected institutional minds in the world today when it comes to gold, and whose fund was awarded a coveted 5-star rating, also said investors need to strap themselves in for a COMEX default and a surge in the gold price.
Hathaway:  “Right now the price action in gold and silver is telling the story.  One thing that has surprised me is that the equity markets have seemed to hold together with all of the bad economic news….
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Soros doubles a bearish bet on the S&P 500, to the tune of $1.3 billion: Headed For a Fall

Soros Fund Management has doubled up a bet that the S&P 500 SPX is headed for a fall.
Within Friday’s 13F filings news was the revelation that the firm, founded by legendary investor George Soros, increased a put position on the S&P 500 ETF   SPY by a whopping 154% in the fourth quarter, compared with the third. (A put or short position basically gives the owner the right to sell a security at a set price for a limited time, and in making such a bet, an investor generally believes the security is going to decline.)
The value of that holding, the biggest position in the fund, has risen to $1.3 billion from around $470 million. It now makes up a 11.13% chunk of all reported holdings. It had been cut to 5.14% in the third quarter, from 13.54% in the second quarter, which itself marked another dramatic lift on the bearish call.  The numbers can be found at Whalewisdom.com, which makes them slightly easier to digest than the actual SEC filing.
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Zulauf Warns on Global Equity Markets

Felix Zulauf is always worth listening to, whether you agree or disagree with his position(s). He is worried about stock valuations, especially in the US. A five-minute Barron’s interview, well-worth watching for anyone in the markets, is available at Zerohedge. Mr. Zulauf sees serious danger ahead. In this interview he provides his advice as to what may happen and how you might protect yourself.
Here is Zerohedge reporting on Zulauf’s latest warning:

“There is a valuation problem with most global equity markets – the most with the US,” warns Felix Zulauf in the following brief clip, adding that sentiment “is extremely one-sided,” but the classic bear-market-inducing recession, he notes, is not on the immediate horizon. Instead, he warns, other problems may be the catalyst for a correction in the US – specifically China’s “mother of all bubbles”, fragility in Asian banks, and balance of payments crises continuing in emerging markets. Zulauf suggests “you have to be short stocks, own US treasury bonds, and also buy gold as panic and risks go up.”

There is nothing new here for most who follow this website. The question, as always, is not if but when.
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Applied Micro Circuits Corporation (NASDAQ: AMCC)

Applied Micro Circuits Corporation provides computing and connectivity solutions for next-generation data centers and service providers. The company’s products include the X-Gene ARM 64 bit Server on a Chip solution, along with the X-Weave family of connectivity products, for cloud/hyperscale data center and enterprise applications. Its X-Weave products address various segments, including 10, 40, and 100 Gbps solutions serving data center and service provider market opportunities. These connectivity products include devices for optical transport network equipment and physical layer devices that transmit and receive signals in a high speed serial format. Applied Micro Circuits Corporation was founded in 1979 and is headquartered in Sunnyvale, California with sales and engineering offices located throughout the world.
To review a current H&S pattern on Applied’s stock, please take a look at the 1-year chart of AMCC (Applied Micro Cirsuits Corporation) below with my added notations:

AMCC had rallied from a low of $6.50 last April to a peak of $15 back in October. Over the last 7 months the stock had created a very important “neckline” of support at $10.50 (blue). Above the neckline you will notice the H&S pattern itself (green). Confirmation of the H&S occurred towards the end of January when AMCC broke its $10.50 “neckline”. So, the stock should be moving lower overall from here.

The Tale of the Tape: AMCC confirmed a head & shoulders pattern. A short trade could be entered on any rallies up to or near the $10.50 area. A significant break back above $10.50 could negate the forecast for a move lower.
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The American Way of Life Will Be Destroyed — Inflation to Exceed 100%…Marin Katusa Interview

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