James Turk - “Silver Will Hit New Highs in a Matter of Weeks”

[bobbyw24]

James Turk - “Silver Will Hit New Highs in a Matter of Weeks”

With tremendous volatility in gold and silver, today King World News interviewed James Turk out of Spain, and subsequently Turk sent the following piece below exclusively for the KWN blog. When asked about gold Turk remarked, “I’m taking my cue here from the mining stocks. The XAU once again held above the 200 level which has been the bottom of its trading range. That suggests to me that both the mining shares and gold are sold out here and due for a big bounce.”

Turk continues:

http://kingworldnews.com/kingworldn..._Will_Hit_New_Highs_in_a_Matter_of_Weeks.html

 

[fatjohn]

Good, I wont be with mixed feelings looking to the next run. Loaded up and ready to go.

 

[bobbyw24]

Silver’s Correction – We’ve Been Here Before

By James Turk, Founder of GoldMoney.com

May 9 (King World News) Silver’s price drop last week has been variously called historic, extraordinary and unprecedented. It was none of those, as is clear from the following chart (above). We’ve been here before, note the four red ovals. All four outline similar drops in price over short periods of time.


This chart is prepared on a log scale so that the distances shown on the chart can easily be compared in percentage terms. In other words, last week’s drop in the silver price from near $50 is essentially no different in percentage terms from the drop that occurred once $15 was approached in 2006 or the drop after $8 was reached in 2004. In both of these prior instances, silver bottomed after the drop, marking a level from which it climbed to eventually make a new high.

The drop in silver’s price in 2008 was different. Silver continued lower, breaking down from the red oval, but we all know why that happened. Lehman Brothers had collapsed, and in the subsequent rush for liquidity, every asset class was hit – even gold and silver. It was a classic example of the ‘baby being thrown out with the bath water’.

(More at bottom of URL in OP)

 

[swissaustrian]

I´m not buying before the coming margin hike (effective after tonights closing bell) is priced in. I.e. i´m waiting until tommorow.

 

[bobbyw24]

I´m not buying before the coming margin hike (effective after tonights closing bell) is priced in. I.e. i´m waiting until tommorow.

Probably a smart move. Time will tell

 

[Gaddafi Duck]

With tremendous volatility in gold and silver, today King World News interviewed James Turk out of Spain, and subsequently Turk sent the following piece below exclusively for the KWN blog. When asked about gold Turk remarked, “I’m taking my cue here from the mining stocks. The XAU once again held above the 200 level which has been the bottom of its trading range. That suggests to me that both the mining shares and gold are sold out here and due for a big bounce.”

Turk continues:

http://kingworldnews.com/kingworldn..._Will_Hit_New_Highs_in_a_Matter_of_Weeks.html

Yes, because looking at past movements dictates future trends. Using technical analysis, you're essentially "predicting" that traders today will be the fortune tellers of tomorrow. If technical analysis was a correct way of "analyzing" and "predicting" markets, then computers today would be more than capable of extracting and acting on this data to where no monetary benefit could be realized as everyone would be doing it.

Technical analysis is BS. There are times where it's "validated" (or perhaps just a coincidence as eventually you'll get it "right" if you guess at the general direction of prices many times), but there are more times where it's been wrong. If it worked, the people on Fast Money would be rich many times over; they're not. Traders lose more times than they win, their losses are just smaller because they hedge the shit out of their bets and get out at the first sign of trouble.

But go ahead and think some Turk guy knows what he's talking about. After all, if one guy somewhere in the world is bullish on silver or gold prices and he gets a Kitco article, someone on this forum is bound to jump on it!

I'm bullish on silver/gold/commodities in general, just as I'm sure everyone else around here is, but I take articles like these with a grain of salt. No one is smart enough to know the psychology of every market player..I think the very rejection of a Federal Reserve proves that point clearly. If the Federal Reserve knew the optimal rate of interest, there would be no distortions--monetary policy would be flawless. But it's because we all here know the Fed cannot possess the billions of pieces of information that go into factoring the day-to-day interest rates, we reject the notion of a Central Bank.

So if the Fed can't accurately "predict" interest rates when they have very intellectual people at the helm, what makes you think some Turk guy has any credibility when he says "Silver will go up X percent in Y amount of time."??? I mean..it's like self-contradictory. You deny the existence of a Fed because no one can have that much info to dictate interest rates perfectly, but a guy "predicting" the price of silver has even a shred of credibility??!?!?

Maybe I'm the only one who finds inconsistencies in this logic.. maybe this James Turk guy can be the Fed chairman. I mean..if he knows what the silver price should be, it shouldn't be that hard to determine what interest rates can be!

 

[swissaustrian]

I wouldn´t dismiss TA as BS in general.
I think that MACD and RSI indicators really have some value.

But the real worth of TA to me is that the herd and especially the robots (hfts) use it. Therefore it has an effect. It´s a self-fulfilling prophecy.

 

[Gaddafi Duck]

I wouldn´t dismiss TA as BS in general.
I think that MACD and RSI indicators really have some value.

But the real worth of TA to me is that the herd and especially the robots (hfts) use it. Therefore it has an effect. It´s a self-fulfilling prophecy.

So technical analysis is a valid method for predicting silver prices (because if someone is bullish on silver, a lot of people here are full of glee and cheer), but if the Fed uses it for interest rates, ah hell, they're retarded and we whip out the whole Austrian Business Cycle Theory to dispel the Fed's credibility?

Amazing..

 

[swissaustrian]

So technical analysis is a valid method for predicting silver prices (because if someone is bullish on silver, a lot of people here are full of glee and cheer), but if the Fed uses it for interest rates, ah hell, they're retarded?

Amazing..

I never said this.
I said: you can identify trends using MACD and RSI. I used them last week and you can check here in the rp-forums what kind of profits i made doing so.
TA has an influence on price movements because a lot of market participants (especially the big ones) use it.
The last parabolic move started in last autumn with a move above $ 20. That was a typical breakout formation. Silver had bounced back from $ 20 several time before. And we had a technical reaction to the breakout.

By the way: What kind of technical analysis for interest rate settings by the fed do you refer to?

 

[pmbug]

No one outside of the Fed knows exactly what criteria the Fed uses when they decide on interest rate policy. They are not honest in disclosing their actions to the public.

 

[Gaddafi Duck]

I never said this.
I said: you can identify trends using MACD and RSI. I used them last week and you can check here in the rp-forums what kind of profits i made doing so.
TA has an influence on price movements because a lot of market participants (especially the big ones) use it.
The last parabolic move started in last autumn with a move above $ 20. That was a typical breakout formation. Silver had bounced back from $ 20 several time before. And we had a technical reaction to the breakout.

By the way: What kind of technical analysis for interest rate settings by the fed do you refer to?

Would it matter what kind of analysis the Fed was using? My point is that no matter what kind of analysis the Fed uses (technical analysis or otherwise), everyone here would reject it for the very reasons that no system, no one person or group of people, can know what the interest rates should be at any point in time. Yet this logic isn't applied when Mr. James Turk comes on and says within a given amount of time, silver will go up X percent.

How does that NOT warrant the same criticism the Fed gets? So we listen to some random guy make claims because he can draw lines on a chart ex-post (love to see him actually project what the chart looks like in the future) because everyone here thinks because if silver prices go higher, it validates their reasoning and they're geniuses for buying it. That's what it comes down to.

Technical analysis utilizes the information day traders provide, bottom line. Day traders do not care what they buy--they often don't know what they're buying. All they care about is an uptick in the price, and they try to explain away why silver went from $38.60 to $38.65 within a matter of seconds as if anything significant according to fundamentals actually justifies a $0.05 swing from one breath to the next.

So if you're taking TA as something that actually means anything, then you're essentially listening to the talking heads on Bloomberg and CNBC that come on and make arbitrary claims. I mean if you get 100 people making different levels of the price of silver, one is going to be more "correct" than the other. That doesn't mean they're right. It's gambling; that's all it is. You weren't a genius because you won the lottery--you just happened to buy the right ticket when millions of other people didn't.

But we'll only look at the one guy saying silver will go up X amount in Y amount of time because if he's right, we're the ones holding the lottery ticket so we're the geniuses. If he's wrong, oh well, it's manipulation by JP Morgan.

Keep kidding yourselves...

 

[Gaddafi Duck]

No one outside of the Fed knows exactly what criteria the Fed uses when they decide on interest rate policy. They are not honest in disclosing their actions to the public.

Again, it's irrelevant what criteria they do use, but I can assure you they are bound to have a few people on payroll trying to use technical analysis to look at markets and try to make sense out of "trends", just as they have statisticians looking at a wide array of information most have no idea exists.

But my point isn't that the Fed uses TA or not..it's the fact that if they DID use TA, people here would criticize them. Simply replace every instance of "James Turk" in this article with the "Federal Reserve" and every instance of "Silver" with "interest rates" and people would mock and roll their eyes.

See the contradiction in logic?

 

[swissaustrian]

And they probably don´t use prices of exchange traded securities, commodities and derivatives etc.
They use their own faked numbers like core price inflation, u3 unemployment etc. These are all gorvernment statistics, not market prices.

 

[Brian4Liberty]

Yes, because looking at past movements dictates future trends. Using technical analysis, you're essentially "predicting" that traders today will be the fortune tellers of tomorrow. If technical analysis was a correct way of "analyzing" and "predicting" markets, then computers today would be more than capable of extracting and acting on this data to where no monetary benefit could be realized as everyone would be doing it.

Technical analysis is BS. There are times where it's "validated" (or perhaps just a coincidence as eventually you'll get it "right" if you guess at the general direction of prices many times), but there are more times where it's been wrong.

If you are just talking about the title "Silver Will Hit New Highs in a Matter of Weeks", yes, take that with a huge grain of salt...

There is an element of self-fulfilling prophesy to "technical analysis". Price points and relative tops/bottoms are set just as much by consensus as anything else. Technical analysis helps set the price points, which then leads to consensus, which then leads to actual prices. Longer term trends are set by fundamentals like devaluing the currency, scarcity, demand, etc.

 

[Gaddafi Duck]

And they probably don´t use prices of exchange traded securities, commodities and derivatives etc.
They use their own faked numbers like core price inflation, u3 unemployment etc. These are all gorvernment statistics, not market prices.

But if they used Technical Analysis, we'd still criticize them. If James Turk uses technical analysis for predicting higher silver prices, we say "OH LOOKIE WHAT I FOUND! See! I'm a genius because I bought silver at $8 and now Mr. Turk says it will go to $50. I'm so smart! :'("

Yet if the Fed used the same analysis for interest rates, we'd all be like "Yup, how's that gonna work fer yah??"

Two different worlds of two different standards...on Planet A, no body can possibly have information to make the decision for optimal interest rates...on Planet B, we can parade around one person predicting higher silver prices.

 

[swissaustrian]

I don´t use TA in commodities only.
I trade options regularly. Most of them are stock options, not commodity options.
In options trading you desperatly need instruments to identify trends. RSI and MACD served me well.
Again see TA as what it is: a self-fulfulling prophecy. It does´nt work because it´s right, but because people use it as a tool to calm their uncertainty about the future down.

 

[Gaddafi Duck]

If you are just talking about the title "Silver Will Hit New Highs in a Matter of Weeks", yes, take that with a huge grain of salt...

There is an element of self-fulfilling prophesy to "technical analysis". Price points and relative tops/bottoms are set just as much by consensus as anything else. Technical analysis helps set the price points, which then leads to consensus, which then leads to actual prices. Longer term trends are set by fundamentals like devaluing the currency, scarcity, demand, etc.

Nah, not at all. Markets move in complete random directions. Why the market is up today but will be down tomorrow has nothing to do with really much of anything. In the short term, nobody can predict where prices are going for anything. In the long term, prices move according to their fundamentals. So where exactly is the "self fulfilling prophecy" when it's obvious no one knows where prices are going from 10:33 AM to 10:34 AM, or from 9:30 AM to 4:00 PM, or from Monday to Tuesday, or from Monday to Friday, or from the 1st of the month to the 31st of the month, yet fundamentals dictate from 2000-2011?

It's not a self-fulfilling prophecy. If it were, people could play off the levels you're talking about and we could all be rich very, very fast. The truth is, the "prophets" (aka day traders) lose more times than they win--their losses are just limited because they bail out at the first sign of trouble and they hedge their bets. Their goal is to lose 2% 5 times so long as they can win 20% one time. So if they win 1 out of 6 times, they're successful.

If TA had any credibility, the people playing the game would win with better odds than rolling a die.

 

[Gaddafi Duck]

I don´t use TA in commodities only.
I trade options regularly. Most of them are stock options, not commodity options.
In options trading you desperatly need instruments to identify trends. RSI and MACD served me well.
Again see TA as what it is: a self-fulfulling prophecy. It does´nt work because it´s right, but because people use it as a tool to calm their uncertainty about the future down.

Nah, if TA were real, you'd win more than you lose. Most traders lose more than they win. If you could day trade your way to wealth, there would be dozens of people in front of Warren Buffett on the Forbes list.

Day trading is gambling. I know people like to romanticize that because their set of candle sticks are red/green (or black/white) and they can make anything meaningful out of hammers and spinning tops, they're sophisticated traders. Because my brokerage account charts a line that drifts closer to "Oversold" compared to "Overbought" then that means the stock is a better buy only if I have my other BS "confirmations" telling me so.

Again, if TA were real, everyone would use it and so no use would get out of it. Computers can exercise trades faster than a human, and computers would have the "winning formula" automatically programmed to win money day in and day out. It doesn't work that way because the short term, no one knows where prices are going (and it's only in the short term where "technicals" are said to dictate price movements). In the long term, everyone agrees it's all about fundamentals. Where in between these does TA work/exist?

I think people confuse TA working with "guessing a half dozen times and finally getting it right on the 7th" as being a justification for TA existing rather than pure coincidence. Again, you guess enough times you're bound to get it right--that's all probability. Flip a coin 10 times and you're likely to get heads on about 5 of those flips..it doesn't make you a fortune teller when you're right, though.

 

[swissaustrian]

You really should read Hayek´s works on spontanous order (summary here: http://en.wikipedia.org/wiki/Spontaneous_order#Markets ) . He has made some great analysis on self fulfilling prophecys.

 

[swissaustrian]

Of course markets are a zero–sum game.
But, who cares about this, if he is winning as an individual?
I use TA as a tool to identify what the herd is doing, not to follow it into hell...
And RSI and MACD are great tools to be a contrarian.