Back on the 15th I posted that I wanted to see Silver gain above 15.75-15.80 range. We had three days close above this range as of yesterday and today we have weakness again. Silver is trending down with the general markets but is still at $15.97. Slo STO (Slow Stochastic) did turn positive and made the move I was looking for, however, I think it is a short term move up with a good potential for a returning downtrend to start in the nearer term. I am still hesitant to add to any Silver positions at this time simply because I think we are going to see further weakness in the coming months, especially once we get to Summer (a traditional down time for the metal markets).
My personal thoughts at this time is to continue holding Silver positions but do not add to them unless we get a good consistent down trend with Silver trading below $15.50 at which point it will become a time to wait and watch for a bottoming out before adding to positions.
I read a story yesterday stating that January CPI "actually fell" for the first time in some really long time period...I don't think we are going to see deflation in the long term. We might see some here and there, but we must remember the U.S. Federal Government has no motive to publish real numbers. With Cost of Living adjustments in Social Security and other entitlement programs, they can not afford to be reporting inflation with all the stimulus monies they are spending. Again, Go to Shadow Numbers website previously posted to get the real scoop on the numbers.
Will we have a deflationary growth/recovery? People can not afford to keep their houses and are having problems paying for utilities and food. Prices for "luxury items" will continue to come down spurring purchases which in turn will spur inventory turnover and more manufacturing. However, most of the manufacturing for the products that Americans consume does not occur in America but overseas. Therefore, where will JOB GROWTH for the US come from? At this point it looks like massive increases in Federal Government size. Yep thats right, more bureaucrats that produce more paper that in turn produces nothing other than potentially taxes, penalties and/or fines...after all the government will have to pay for all of the Stimulus monies one way or another.
I do not know where our country is truly headed. I do know that eventually we will see inflation re-enter the picture which will result in increasing interest rates. So you will not want to hold LONG-TERM bonds. But where to put the money? Gold and Silver when prices stablize and give a clear path forward. Until then we will keep an eye out for changes.
(Sorry for the ramblings, lots going on today and just wanted to post a few quick thoughts).