As you know, our models are highly analytical and developed over 30 years.  Our models are not strangers to manias and in the past, have successfully made a lot of money on correctly predicting the start and end of manias.  So far, our batting average has been 100%.  Only time will tell as to how the signal on silver fares. 

At The Arora Report, our computers have been monitoring every tick of silver futures, major silver ETFs, and major silver miners, and feeding the data into proprietary algorithms.   These algorithms are showing that the smart money is beginning to aggressively sell in the latest run up. 

Our models pay a lot of attention to the past but give more weight to what is happening now.  According to our models, there is an 80% probability that silver is at or near a short-term top and a 75% probability that the top may be long-term.  This also means that there is a 20% probability of silver going higher.

The ZYX Global Multi-Asset Allocation Model has two variants--a higher risk model and a lower risk model.  The lower risk model attempts to limit risk to 50% of the market risk, and the higher risk model attempts to limit risk to 85% of the market risk.  In view of our risk averseness, we highly recommend that our subscribers exit their silver position immediately.

Our plan is to replace silver allocation with gold.  A quick look at the chart shows that the recent move in silver is almost 600% of the move in gold. 

Normally we would have given a signal to allocate 10% to gold at this juncture, but we hesitate for the following two reasons:

• ABX is the largest gold miner in the world.  Historically ABX has added to its precious metal reserves by acquiring other precious metal companies. 

  This morning, ABX announced that it is spending over $7 billion to acquire a copper miner.  This is a major purchase.  Please note that ABX is not buying a gold or silver miner. 

  There is an old saying, "Watch what they do, not what they say."

  Is ABX sending a signal that the direction of precious metal prices from here onwards is down?

• History will be made on Wednesday when the Federal Reserve will hold its first news conference after a two day policy meeting. 
  
  Ben Bernanke, the Federal Reserve chairman, has to make one simple statement regarding precious metals, and gold will fall quickly. Of course, we do not know if he will make such a statement.  There is also a possibility that his statement may start a new run in precious metals. 

We will leave it up to our subscribers' individual preference as to allocate to gold now or wait  for the Fed's statement.  Because of our risk averseness, our inclination is to wait.

Stay tuned, we will keep you informed of the next actionable step.