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
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 Price Depressing Downtrend Will Eventually End

Commodities / Gold and Silver 2015 Feb 23, 2015 - 04:25 PM GMT

By: Clive_Maund

Commodities

Following the recent explosion in Commercial short and Large Spec long positions in silver, followed by a breakdown below the neckline of a potential Head-and-Shoulders bottom, the outlook for silver is bearish, with the metal stuck in a stubborn downtrend.

On its 6-month chart we can see how its advance early in the year hit a wall at its falling 200-day moving average, when Commercial short positions exploded, as we noted at the time on the site, and it has since reacted back, and with it failing to stabilize at the support at the neckline of the potential Head-and-Shoulders bottom, the medium-term outlook is bleak, which will not be changed by any bounces occasioned by the fact that it is now short-term oversold.


Silver 6-Month Chart

The 5-year chart pretty much tells us all that we need to know, as it makes very clear that silver is stuck in a stubborn downtrend, which at this point shows no sign of ending. Note how the price recently failed not just at its falling 200-day moving average, but also at a zone of resistance which was earlier an important support level. This chart shows that new lows are likely to ensue. Investors should adopt a mechanical approach and simply assume that the downtrend remains in force until the price breaks out of it upside on good volume.

Silver 5-Year Chart

The long-term 15-year chart reveals that there is a zone of substantial support between $13 and $15, which may prevent further significant losses and may prevent new lows from occurring. However, this is a weak picture and will remain so until the price can break out of the downtrend shown.

Silver 15-Year Chart

Because silver underperforms gold during sector bearmarkets, and the silver over gold ratio downtrend remains in force, as made plain by the 7-year chart for this ratio shown below, it is clear that the sector downtrend remains in force until we see a breakout from this ratio downtrend.

Silver over Gold 7-Year Chart

The silver hedgers chart, which is a form of COT chart, showed a bearish extreme at the peak a month ago, which not eased much on the reaction, suggesting further weakness ahead.

Silver Hedgers Position Chart

The silver optix or optimism chart is in middling ground and therefore doesn't provide much guidance.

Silver Optix Chart

Finally, although the downtrend in silver looks depressing and like it may go on forever, we should remember that all downtrends end at some point. A big reason for the gloom afflicting the PM sector is that investors are happily chasing the broad stockmarket higher and higher. They are following on the heels of Big Money which was awarded interest free grants by the Fed and other Central Banks, to go and play the carry trade and drive up global stockmarket and other favored speculative investments such as select property markets, like London. There are various indications that this could come to a dramatic end before much longer. When that happens we could see a sudden change in fortunes for the PM sector.

By Clive Maund
CliveMaund.com

For billing & subscription questions: subscriptions@clivemaund.com

© 2015 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