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 Believed to Have Bottomed Ahead of Major Uptrend

Commodities / Gold and Silver 2013 Mar 03, 2013 - 05:42 PM GMT

By: Clive_Maund

Commodities

The big story with silver is that the Commercials are continuing to unwind their earlier massive short position at a very rapid rate, and of course booking massive profits in the process. We had pointed out in the last update that until their short positions eased further, silver was likely to back and fill and that's what happened last week, as after a 4-day rally into Tuesday, silver dropped back for the rest of the week to make a new intraday low on Friday.


We can see this latest action on the 8-month silver chart below, which shows that after the high-volume capitulation panic low of the preceding week, silver staged a 4-day rally towards a resistance level before turning lower again and heading back to the vicinity of its lows. On Friday it bounced back quite strongly from intraday lows, leaving behind a bullish 'spinning top' candlestick on its chart, like gold, which is a bullish sign, especially as it occurred at a support level and at its channel support line - this may mark the final low for this downtrend.

Silver 8-Month Chart

While there has been much bearish talk doing the rounds in recent days and general gloom and despondency, we can see on silver's 3-year chart that it still looks alright. It HAS NOT broken below the key support at the bottom of its large trading range, and is thus considered (by us) to be in an ongoing large consolidation pattern within its major long-term bullmarket.

Silver 3-Year Chart

The support at the bottom of the large trading range is so clearly defined, so strong and so obvious that we need to be careful regarding the placing of stops. If we can see this you can be sure that Big Money can, so it is just possible that they will run silver briefly below this support to trigger the stops that are clustered beneath it, and mop up all the remaining holdings that they haven't already netted before a sudden and dramatic reversal back above the support, but the reality is that they don't really need to do this - they've squeezed most people out already, and all the indications are that this support will now hold, especially as the outlook for gold is now so positive.

We mentioned the COTs at the start, so now let's end by looking at the latest COT chart. While the Commercials' short positions in gold increased somewhat last week, albeit from a low level, they continued to plunge in silver, which is very good news indeed for silver bulls - and this was despite silver having rallied for 4 days into last Tuesday when this data was last logged. This is a sign that the Commercials are scrambling to book their large profits and get out of the way before a rally starts. When the price dropped again from Wednesday through Friday, you can bet that their short positions were continuing to be closed out for a massive profit at a very rapid rate, resulting in considerably lower readings than are shown on this chart. We can thus allow that Commercial short and Large Spec long positions have dropped back sufficiently to clear the way for a big rally to gain traction before long.

Silver COT

The conclusion to all this is that silver, like gold, is believed to have bottomed or to be very close to doing so, and to be readying for its next major uptrend that should break it out of its large trading range and take it comfortably to new highs. It may have hit bottom on Friday.

By Clive Maund
CliveMaund.com

For billing & subscription questions: subscriptions@clivemaund.com

© 2013 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