If in fact the Fed must cut rates at least one or two more times, and must press Fed funds to 4.25-4.00% during this rate cut cycle -- avert recession and stimulate economic growth -- then just maybe the "inflation genie" will be allowed out of the bottle for a while. We will know that if and when Silver (not gold) starts to accelerate to the upside. When rising inflation psychology takes root, it will be the less obvious "precious" metal that flashes its buy signal. Based on the enclosed long-term chart of spot silver prices, the technical work argues that it is a matter of when, not if, silver takes off. Since May, 2006, or for the past 16 months, silver prices recently emerged. The trick will be to stay the course with manageable risk in the high-priced Silver Trust ETF (SLV) to capture a potentially powerful upmove of 25% to 30%.



Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com, a real-time diary of his technical chart analysis and trading alerts on all major markets. For more of Mike Paulenoff, sign up for a free 15-Day trial to his MPTrader Diary by clicking here.