Monday, March 21, 2011

3/21 2:10

Stock market is going sideways in an apparent 4th wave.  I'll be able to buy on the retracement after a 5th completes at around this price level, so I'm not in a hurry to buy.    SPX is bumping against it's 50-day.
The following chart is weekly monetary base 10-week ROC vs. silver.  The latest data point is March 9 and the base is moving sharply higher.  The correlation between Fed asset purchases and monetary base is imperfect so I am not assuming that the rate of change of monetary base will coincide with the end of QE2.  Rather, I am assuming it's ascent will slow prior.  When the ROC declines below 10% that will be the top in precious metals.  Since the data is released only bi-weekly we probably won't see this happen until after the silver top.

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