Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Silver Breaks Out of Basing Pattern, Starts Next Major Uptrend

Commodities / Gold and Silver 2011 Jul 15, 2011 - 02:43 AM GMT

By: Clive_Maund

Commodities

Best Financial Markets Analysis ArticleYesterday's high volume breakout above its 50-day moving average marked completion of the intermediate basing pattern and the start of the next major uptrend in silver. Everything in now in place for a substantial uptrend to develop in coming months that should take silver comfortably to new highs. Fundamentally yesterday's breakout was due to the realization in the markets that QE is set to continue, whether called QE or not, and in fact it must continue, as any attempt to apply the brakes at this late stage would result in a global systemic economic collapse.


Hyperinflation will be the inevitable end result, as will prices for gold and silver at levels that many now would consider to belong solely in the realms of fantasy. We already had a foretaste of this coming ramp in Precious Metal prices earlier this year with the big runup in silver prices, before powerful interests decided the time was right to put the boot into the little guy by repeatedly hiking margin requirements over a short period. This served big money interests in 2 ways - first of all it crashed the silver price so that they can move in and scoop up more of it. Secondly big money is not all at concerned about margin requirements, since being wealthy in the first place they don't need to bother with margin at all, although it suits them to use it at times to maximise leverage. What the hiked margin requirements did do was to throw the little guy off the train, and like one of those old westerns big money is stood at the open end of the train carriage lighting up a cigar and grinning with satisfaction as the little guy rolls down the embankment and is left lying in the dust as the train chugs off into the distance without him.

Our 6-month chart for iShares, which is a good proxy for silver, shows the now extraordinarily bullish setup for silver. For some weeks it was not clear whether the C wave of the now completed A-B-C correction would take the silver price below the A wave low in May, which for iShares was exactly at $32, and had Greece not been bandaged up it would have, of course. The first sign of improvement was the breakout from the C wave downtrend channel about a week ago, after which the price was temporarily restrained by unfavorably aligned (falling) 50-day moving average, which forced a test of support at the top line of the channel, which we correctly anticipated. Then just yesterday the price blasted through the 50-day moving average on the highest volume for weeks, the importance of the resistance in the vicinity of this average being illustrated by the way the price gapped above it - a bullish "breakaway" gap. This is what we have been waiting for. This marks the end of the intermediate base building phase and the start of the next major uptrend.

Silver 6-month Chart

The picture could not be more bullish. The price and its 50-day moving average have corrected back almost to the rising 200-day moving average which is now coming into play to support a major advance. The volume pattern during the base building process has been positive, with volume contracting, and the Accum-Distrib line shown at the top of the chart rising, indicating accumulation. Finally the COT charts are at their most bullish for ages with Commercial short and Large Spec long positions being at their lowest levels for a very long time.

Silver COT

Silver Price / Commercial Ratio Short-Long

The lower COT chart is courtesy of the renowned Scarborough Bullion Desk in England.

By Clive Maund
CliveMaund.com

For billing & subscription questions: subscriptions@clivemaund.com

© 2011 Clive Maund - The above represents the opinion and analysis of Mr. Maund, based on data available to him, at the time of writing. Mr. Maunds opinions are his own, and are not a recommendation or an offer to buy or sell securities. No responsibility can be accepted for losses that may result as a consequence of trading on the basis of this analysis.

Mr. Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications.

Clive Maund Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in