Best of the Week
Most Popular
1.What Happened to the Stock Market Crash Experts Were Predicting - Sol_Palha
2.London Housing Market Property Bubble Vulnerable To Crash - GoldCore
3.The Plan to Control ALL Your Money is Now at Advanced Stage
4.Why Gold Is Set For An Epic Rally This Spring - James Burgess
5.MR ROBOT NHS Cyber Attack Hack - Why Israel, NSA, CIA and GCHQ are Culpable - Nadeem_Walayat
6.Emmanuel Macron and Banking Elite Win French Presidential Election 2017 - Nadeem_Walayat
7.Trend Lines Met, Technical's are Set - US Dollar is Ready to Rally (Elliott Wave Analysis) - Enda_Glynn
8.The Student Debt Servitude Sham - Gordon_T_Long
9.Czar Trump Fires Comey, Terminates Deep State FBI, CIA Director Next? - Nadeem_Walayat
10.UK Local Elections 2017 - Labour Blood Bath, UKIP Death, Tory June 8th Landslide - Nadeem_Walayat
Last 7 days
How Investors Can Profit From The Coming Resource Wars - 29th May 17
Gold vs. Gold Mining Shares – Just The Facts, Ma’am - 29th May 17
Walkers Crisps Pay Packet £5 Cash Wins After Buying 64 Multi-packs - 29th May 17
SPX/NDX/NAZ Hit New All-time Highs - 27th May 17
GBPUSD Top in Place, GOLD Price Ready to Rocket? - 27th May 17
Silver Mining Stocks Fundamentals - 27th May 17
BBC Newsnight Falls for FAKE POLLS, Opinion Pollsters Illusion for Mainstream Media to Sell - 27th May 17
UK Local Election Results Forecast for General Election 2017 - 26th May 17
Stock Market & Crude Oil Forecast! - 26th May 17
Opinion Pollsters UK General Election Seats Forecasts 2017 - 26th May 17
Bitcoin and AltCoins Crypto Price Correction - 26th May 17
Bearish Head and Shoulders in EURUSD? - 26th May 17
SELL US Stocks - Massive Market CRASH WARNING! - 26th May 17
EURGBP: A Picture of Elliott Wave Precision - 26th May 17
Credit Downgrades May Prompt Stock Market Capital Shift - 26th May 17
Rosenstein and Mueller: the Regime Change Tag-Team - 25th May 17
Stock Market Top - Are We There Yet? - 25th May 17
Should I Invest My Fortune in Gold? Inaugural Lecture by Dr Brian Lucey - 25th May 17
USD/CAD Continues Decline - 25th May 17
Bitcoin Price Goes Loco! Surges through $2,500 Despite Unclear Fork Issues - 25th May 17
The US-Saudi Arms Deal - Sordid Saudi Signals - 25th May 17
The No.1 Commodity Play In The World Today - 24th May 17
Marks and Spencer Profits Collapse, Latest Retailer Hit by Brexit Inflation Tsunami 2017 - 24th May 17
Why Online Trading Platforms Are Useful for Everyone - 24th May 17
The Stock Market Will Tank Hard - 24th May 17
It’s Better to Buy Gold & Silver When It DOESN’T Feel Good - 24th May 17
Global Warming - Saving Us From Us - 24th May 17
Stock Market Forecast for Next 3 Months - Video - 23rd May 17
Shale Oil & Gas Production Costs Spiral Higher As Monstrous Decline Rates Eat Into Cash Flows - 23rd May 17
The Only Metal Trump Wants More Than Gold - 23rd May 17
America's Southern Heritage is a Threat to the Deep State - 23rd May 17
Manchester Bombing - ISIS Islamic Terrorist Attack Attempt to Influence BrExit Election - 23rd May 17
What an America First Trade Policy Could Mean for the US Dollar - 22nd May 17
Gold and Sillver Markets - Silver Price Sharp Selloff - 22nd May - 22nd May 17
Stock Market Volatile C-Wave - 22nd May 17
Stock Market Trend Forecast and Fear Trading - 22nd May 17

Market Oracle FREE Newsletter

Why 95% of Traders Fail

Silver Price Technical Perspective

Commodities / Gold and Silver 2013 Nov 10, 2013 - 12:11 PM GMT

By: Michael_Noonan

Commodities

All people in the futures markets are there to make money, [hedgers excepted], or they would not subject themselves so unnecessarily to the risks. Even buyers of the physical, Stackers, want to get as low a price as they can. More people are fundamentally inclined than are technically driven. As a consequence, they like to read articles that provide a degree of psychological comfort in support of their own view of the market.

With the onslaught of bullish news/facts/figures about silver over the past year, one need only look at where the price of silver is and ask, "How is that bullish information working out for you?" This applies less to buyers of the physical, but even they need an occasional reminder that even though price has declined, their end game is still in process.


It can be helpful to understand the market from a chart perspective because you will have a more accurate read for what to expect in the next week[s] or month[s], or until you see a change in the structure that signals an important move is underway.

While some of you may think it is difficult to read a chart, all that is required is a bit of common sense attached to the explanations we provided with each chart.

When will silver rise to higher values? Answer: No one knows. It has taken longer than most thought, and it will continue to take longer than most believe, but there is one thing for sure, the price of silver will retest the old high, and then proceed to exceed it, by at least a double.

It takes time to turn a market around, and silver is in that process. There is no degree of certainty that a bottom has been reached, but there exist at least a probability the recent lows may hold. Whether the lows hold or not, one cannot lose sight of why accumulating silver has been so important. When price finally accelerates higher, the trying of one's patience will quickly be forgotten and all will be well.

The charts relate a story of the news/facts/figures, just in bar form. This is what the market is saying, as of Friday.

Everyone in the world who follows silver knows the importance of $26 for silver. Until price can rally and hold above it, do not expect higher levels. It is that simple.

There is a small 8 week base that is currently being retested by another small trading range. Whenever a trading range retests and holds above the previous one, it has a bullish connotation. Because silver is in an overall down trend, upside strength is not a dominate factor, so expect additional time required to develop a more overtly bullish character.



The two bars at rally high "A" showed EDM, [Ease of Downward Movement] on high volume, as price declined. At the current low of the decline, "B," there is another high volume effort, but instead of showing EDM, the two bars overlap one another. When you see overlapping bars, it is indicative of a balance between the efforts of buyers and sellers. The fact that buyers were more responsive at the low of the correction speaks well for the prospects that support may hold.

That answer will come next week. If it is to be support, there will be the beginnings of another rally. If support disappears, lower prices will result. We do not have to guess which, but instead follow the market's lead, either way. For sure, if price declines, one would not want to be a buyer, based on the message of the market.



Two points worth considering from this 90 minute intra day chart. There was a high volume rally on 15 October, left side of chart, that was retested three times at the 21.10 area, and that led to another strong rally. From that kind of market development, we can expect buyers to defend that support area on a retest. That retest is now at hand.

There was a wide range, high volume decline, last Thursday. On Friday, there was another sell-off on the highest intra day volume in over a month. Volume is a measure of effort. The question to ask is, if the effort was the greatest in recent days, why was the net result so little?

Keep these last two bars in mind in relation to the daily chart, above, where the discussion centered on overlapping bars, a balance between buys and sellers. So far, the increased effort failed to reach the support from the 21.10 area, when it was more than opportune to not only retest but even break it. After all, silver is in a down trend.

Were the two bars reflecting a balance, or more of buyers overcoming sellers in preparation for a rally?

We cannot know the answer, [no one can], until next week, but it does raise the possibility of a trade potential should support hold. It may be only short-term, if one develops, but what the charts show is how developing market activity can be used to advantage.

The same holds true for a larger time frame. Stackers need to keep on stacking, and futures traders need to be select, if buying, while the trend remains down. When and as a change in trend occurs, from down to up, making buy decisions will become easier, not that trading is easy, but knowing the trend and market context puts the odds of success in a much higher arena of probability. One then has an edge.


By Michael Noonan

http://edgetraderplus.com

Michael Noonan, mn@edgetraderplus.com, is a Chicago-based trader with over 30 years in the business. His sole approach to analysis is derived from developing market pattern behavior, found in the form of Price, Volume, and Time, and it is generated from the best source possible, the market itself.

© 2013 Copyright Michael Noonan - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Michael Noonan Archive

© 2005-2016 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

Catching a Falling Financial Knife