"No warning can save people determined to grow suddently rich" - Lord Overstone

  • 6 hours The Real Winners Of The Real Estate Business
  • 7 hours 3 Reasons Small-Cap Stocks Are Booming
  • 8 hours Chinese IPO Fervor Slows As Xiaomi Disappoints
  • 9 hours How Corporate America Is Filling The Gaps In Public Education
  • 10 hours Bezos’ Space Flight Gamble
  • 12 hours Is This The Answer To High Gasoline Prices?
  • 14 hours Netflix Shock Hits FAANG Stocks Hard
  • 1 day Foreign Investors Losing Interest In The U.S.
  • 1 day Chinese Police Bust $1.5B Crypto Gambling Scheme
  • 1 day Can Artificial Intelligence Compete With Real Doctors?
  • 1 day UK Stocks Bounce Back From Worst Selloff In Years
  • 1 day Geopolitical Uncertainty Weighs On Global Markets
  • 2 days Gold May Still Be On Its Way Down
  • 2 days Bionic Cells: The Future Of Solar Energy?
  • 2 days The Biggest Winners Of Q2 Earnings Season
  • 3 days Experts Suggest A Gold Shortage May Be Looming
  • 4 days The World Is Drowning In $247 Trillion Debt
  • 4 days Tightening Immigration Policy Could Hurt The Tech Sector
  • 4 days The First Bitcoin ETF Might Be Just Months Away
  • 4 days U.S. Rent Costs Hit All-Time High
Chinese IPO Fervor Slows As Xiaomi Disappoints

Chinese IPO Fervor Slows As Xiaomi Disappoints

The Chinese IPO space was…

These 3 Industries Are Immune To The Trade War

These 3 Industries Are Immune To The Trade War

U.S. President Donald Trump has…

3 Reasons Small-Cap Stocks Are Booming

3 Reasons Small-Cap Stocks Are Booming

As major market indexes waiver,…

Silver Market Update

Silver is pushing right into the apex of its 15-month triangle pattern, which means that wild and erratic action is to be expected once it breaks out, which it must now do within a month or two, maximum. Gold also pushed into the apex of its smaller triangle, before proceeding to break out and then whipsaw a lot of market players with wild swings.

The 2-year chart for silver shows the huge triangular pattern and its associated support and resistance levels. The lower line of the triangle is clearly a very important support line, especially as, when produced back, it can be seen to be a long-term trendline that provided support in the past. This pattern, which must resolve itself soon, is already getting "very long in the tooth". When prices remain stuck in such a pattern for more than two-thirds to three-quarters of the way from the point of origin of the triangle to the apex, as is certainly the case here, then the subsequent breakout cannot be trusted, and wild, erratic action, involving whipsaw swings is to be expected - and this is especially the case with silver, which is prone to such behaviour even without the benefit of a situation like this

Traders will therefore need to exercise more than the usual care and discipline once this breaks out, and it will probably be wise to lock in profits quickly whenever a significantly overbought or oversold condition develops.

On the 6-month chart, the recent reaction halted where it should, at support above the apex of the smaller triangle shown. Price action thus far is reasonably positive with the price finding support exactly at the 50-day moving average above the big triangle trendline and both moving averages being in bullish alignment. As we can see on this chart and the 2-year chart, there is a lot of support in the $.6.80 - $7 area, which means that if it fails, it is likely to dramatic, precisely because it is so important.

While price action thus far does look positive, apart from, as already mentioned, the very late breakout from the triangle, the latest COT chart continues to look bearish short-term. Although the Commercials' shorts fell slightly this past week, they still remain at a high level, which does not look good, especially as the Commercial short position in gold just ramped up. Another negative is the now high open interest, the green line on the COT chart shown, which means that there are a lot of chips on the table, and with the Commercials rather heavily short and the Large Specs with a fairly high long position, you can guess who's probably going to going to get the "short" end of the stick.

Back to homepage

Leave a comment

Leave a comment