Correlation Economics Backup

J.P. Morgan COMEX vault registered silver stock just dropped in half today. This also happened in 2016, when silver shot higher. Who knows what will happen now.  

The following chart shows that the Fed will buy more treasuries than it will issue. That means bond yields will never go up. The Fed will be able to push bond yields down. This is of course very bullish gold as gold likes low bond yields. Moreover, the Fed balance sheet will continue to grow this year, possibly to $10 trillion by the end of the year and eventually to $12 trillion by the end of 2021.

Whenever the amount of silver stock declines at the COMEX, this means there is a shortage of silver. The silver price will start to rise. This happened in 2016, where silver hit a bottom. The same happened in June 2019, when silver stock levels topped out.

Jesse Livermore was one of the most successful traders in the world. He said that traders should always buy at the point of least resistance. That point of least resistance is right after resistance is broken. Whenever resistance is broken to the upside (downside), the probability is the highest for a strong move to the upside (downside). I call this the "breakout" point. Gold is now pushing up against strong resistance at $1800/ounce. Once that level is broken to the upside, there is no upper limit anymore. Everyone on this planet who bought gold will be in the money and there won't be any reason to sell anymore. Bitcoin is still in a trading range, so we need to wait for a breakout. For more info watch this video.