First Majestic Silver Corp - AG | by requestI am flattered to have had a request for a chart. Special thank you to @RocketFuel20 🙂
My view of this chart is that the price action is somewhat inconclusive at the moment. That said, we CAN summarize a theme for which there is evidence to believe that this AG is NOT YET ready to buy:
How does the price behave?
Following a top, we observe from August 2014 - January 2016 :
1. Failed breakout; 2. a subsequent selloff (collapse tbh); 3. a little rally; 4. another subsequent selloff - after which point we develop a bottom and then takeoff with a legit and very attractive breakout.
Notice this series of events takes place over roughly 17 months.
Based on where we are today and the 1 - 4 summary provided above, I think it is reasonable to expect some kind of rally in the short term. Will it be the big attractive breakout? I cannot say for sure, but I remain doubtful based on the historical behavior and the "why", which follows:
Now we can start to ask why , based on what we observe in in the economy today:
Kicking off this post, I mention that the evidence is inconclusive at the moment. To me, $AG is not something I would buy or short, but rather I would wait until we see more of a bottom.
Last, the US is raising interest rates, which means that the US Dollar is likely to gain strength (not so bullish for silver - or any precious metal... or any risk asset really). On that note, when the time comes to buy silver, I think you are better suited to buy in the spot market, as opposed to a company that produces silver to sell on the open market. So for right now, the portfolio management question becomes: would you rather own US Debt securities that are paying a guaranteed risk-free rate of return, or would you rather speculate in silver? I personally would not choose to speculate in silver, based on the data we have in this chart.
Take care.
God bless!
