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SILVER: Buckle Up For A Big Move
There are several extremes in the silver market based on the data that we monitor. It is clear that a big move is underway.
Seasonal data shows that July and August are the strongest months of the year after January and February. We expect a rally during the summer months.
The daily chart indicates that silver is breaking out through a declining trend line that started last summer. That trendline, however, is being tested currently. So we really are at a pivotal point.
Source: Finviz
The weekly chart shows that silver is sitting exactly at the declining trend line that extends back to the peak in April 2011.
Source: Finviz
These trend lines are quite important. The key questions are whether the breakout will be confirmed on the weekly chart, and whether it will hold.
Last summer the strong U.S. dollar capped a rally in precious metals. Because the dollar is consolidating its recent gains, we do not believe that precious metals prices will be suppressed this summer.
Silver has declined 67% from its multi-decade top, which occurred in 2011. Since then the grey metal has been consolidating for 2 years. Market sentiment vis-à-vis silver is neutral to bearish. These conditions strongly suggest a rally and perhaps a new bull market.
Technically, silver started a secular rally in 2004 at $6 and peaked in April 2011 at $49.50. The 23.6% Fibonacci retracement level comes in at $15.18, the multi year lows which was tested in October and November 2014.
Source: Stockcharts
Last month the short positions in SLV, the largest silver ETF, decreased by a huge -38%. Currently there are 12.8 million shares of SLV short out of 332.9 million shares, one of the lowest in many years.
Interestingly, the SLV ETF holds 856 million ounces of physical silver, which is almost identical to the February 2013 amount before the silver price collapsed. That is significant because GLD, the largest gold ETF, showed that its physical gold holdings decreased 34% in the same period of time. This contrast shows a healthy interest in silver.
The COMEX Commitment of Traders report for positions at the close of trading on Tuesday June 9th showed that 18,028 short contracts were covered by commercial traders. That is one of the largest changes in the history of COMEX silver. It comes 3 weeks after 19,706 short contracts were added by commercial traders (at the close of trading on Tuesday May 19th), also one of the largest changes ever. According to the latest data, open interest stands at 189,524 contracts, the highest in history, and equal to the previous top set in Q1 of 2008.
The rate of change in short positions by commercial traders, one of the key indicators we are monitoring, has moved aggressively from bearish to bullish in a matter of 3 weeks. There clearly is a lot of tension in the silver market, and the breakout or breakdown is going to be explosive.
Source: GoldchartsRus
If it would be some “good” news, the commercial short positions in COMEX gold are neutral.
So the key question really is whether silver is leading the precious metals complex lower.
Conclusion:
Silver is testing a critical trendline of both the daily and weekly chart. Given the seasonally strong months of July and August, we expect a rally in silver. However, given the large open interest in COMEX silver, a "false breakout" would invalidate that view. The pivot price is $16.50. Any sustained move above or below that price will determine the next short to intermediate cycle. Keep your eyes in silver now!
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LMAO......ripped right from the pages of Kingworldnews.
What amazing interview awaits us there today??
"we do not believe that precious metals prices will be suppressed this summer"
I find that to be a very odd statement.
After ample internal reasoning and thought, here is my conclusion
"I DO believe that precious metals prices will be suppressed LIKE A MF this summer"
Only on days ending in Y
I wager 50 quatloos....
You do mean a two yellenbux move? Up or down?
Because trend charts don't mean anything for PMs anymore.
Interesting how people still chase after/sweat the technical details, when true price discovery in this arena was snuffed out long ago. There simply cannot be (for Western economies), any alternative, let alone an alternative that reflects the true nature of the current situation such that might inspire lack of confidence in the system. It's a dead issue until geopolitical events outside the control grid dictate otherwise.
Metals only go up right?
Good for cost averaging though. Screw the sales pitch. Silver is looking to leg down further.
Big silver move ... I just made $25 in July Silver
Don't spend it all at once. I suggest visiting MacDonald's on two separate occasions.
Why do people draw lines on the chart of a completely rigged "market" and then proceed to draw conclusions from it? What a ridiculous waste of time. Go outside and get some fresh air instead.
Lines on charts are for morons, but the chicken livers we analyzed all point to big gains by Saturnalia.
Todays charts just connect the dots, that were plotted yesterday, and released to the algos today.
Has CME removed margin? If not, then nobody knows what the silver price is going to do.
COMEX price will crash before it flies, and it will crash during a major market correction, as traders are forced to liquidate their portfolios to cover margin requirements on less liquid markets.
True dat, and stackers will stack right on through it....
That chart screams "buy buy buy".
PMs have been dead money close to 5 years and there is another 5 years before it finds its bottom.
good; I'll just keep dollar cost averging; and if Silver ever touches $10 --- i'm taking out a $50k loan and going all-in :P ;)
I'm trying to time that decision like that as well. The problem is the urgency of silver is paired will the urgency of prep spending.
shit man, that shiney stuff is fucking heavy, carry it yourself...
I laughed out loud when I read this headline - didn't bother to read the article.
TO THE MOOOOOOOOOOOOOOOOOOOOOOOON !11111111111111111111111111111111111
Your fancy trendlines don't mean dick, and furthermore technical analysis in these " markets" in general is about as much use as self-tanning lotion on Rachel Dolezal.
Whenever I read "buckle up" in any financial piece I chuckle. Why is that?
I dont know, but buckling up for a big move sounds like having to strap yourself to the toilet as a result of something really painful on it's way (usually after hot wings or nuclear-style chili).
"Buckle up = Ben Dover" - Gordon Liddy
I don’t know about you, but the hot wings or nuclear-style chili (or habanero peppers) makes me feel like I’m buckled up atop a Soyuz rocket. If nothing else, it is cleansing by intense heat.
because it rhymes with "suckle"
... And Knuckle...
Oh wow..
I guess technical and fundamental forces will overwhelm the Feds unicorn printing press and funding of the suppression of the only Constitutional money in existence.
Not yet..
But the day will come..
Yeah. Blah blah blah, technical, blah blah blah, surge.
Got silver?