Best of the Week
Most Popular
1. Next Financial Crisis Is Already Here! John Lewis 99% Profits CRASH - Retail Sector Collapse - Nadeem_Walayat
2.Why Is Apple Giving This Tiny Stock A $900 Million Opportunity? - James Burgess
3.Gold Price Trend Analysis - - Nadeem_Walayatt
4.The Beginning of the End of the Dollar - Richard_Mills
5.Stock Market Trend Forecast Update - - Nadeem_Walayat
6.Hindenburg Omen & Consumer Confidence: More Signs of Stock Market Trouble in 2019 - Troy_Bombardia
7.Precious Metals Sector: It’s 2013 All Over Again - P_Radomski_CFA
8.Central Banks Have Gone Rogue, Putting Us All at Risk - Ellen_Brown
9.Gold Stocks Forced Capitulation - Zeal_LLC
10.The Post Bubble Market Contraction Thesis Receives Validation - Plunger
Last 7 days
Rising US Home Prices and Falling Sales - 8th Dec 18
Choosing Who the Autonomous Car Should Kill - 8th Dec 18
Stocks Selloff Boosting Gold - 8th Dec 18
Will Weak US Dollar Save Gold? - 7th Dec 18
This Is the End of Trump’s Economic Sugar High - 7th Dec 18
US Economy Will Deteriorate Over Next Half Year. What this Means for Stocks - 7th Dec 18
The Secret Weapon for Getting America 5G Ready - 7th Dec 18
These Oil Stocks Are a Ticking Time Bomb - 7th Dec 18
How Theresa May Put Britain on the Path Towards BrExit Civil War - 7th Dec 18
How easy is it to find a job in the UK iGaming industry? - 6th Dec 18
Curry's vs Jessops - Buying an Olympus TG-5 Tough Camera - 5th Dec 18
Yield Curve Harbinger of Stock Market Doom - 5th Dec 18
Stock Market Crashed While the Yield Curve Inverted - 5th Dec 18
Global Economic Outlook after Trump-Xi Trade War Timeout - 5th Dec 18
Stock Market Dow Plunge Following Fake US - China Trade War Truce - 5th Dec 18
Subverting BREXIT - British People vs Parliament Risks Revolution - 5th Dec 18
Profit from the Global Cannabis Boom by Investing in the Beverage Industry - 4th Dec 18
MP's Vote UK Government Behaving like a Dictatorship, in Contempt of Parliament - 4th Dec 18
Isn't It Amazing How The Fed Controls The Stock Market? - 4th Dec 18
Best Christmas LED String and Projector Lights for 2018 - Review - 4th Dec 18
The "Special 38" Markets You Should Trade ebook - 4th Dec 18
Subverting BrExit - AG Confirms May Backstop Deal Means UK Can NEVER LEAVE the EU! - 3rd Dec 18
The Bottled Water Bamboozle - 3rd Dec 18
Crude Oil After November’s Declines - 3rd Dec 18
Global Economic Perceptions Are Shifting - Asia China Markets Risks - 3rd Dec 18
Weekly Charts and Update on Equity Markets, FX Trades and Commodities - 3rd Dec 18
TICK TOCK, Counting Down to the Next Recession - 3rd Dec 18
Stock Market Key (Short-term) Support Holds - 3rd Dec 18
Stocks Bull Market Tops Are a Process - 3rd Dec 18
More Late-cycle Signs for the Stock Market and What’s Next - 3rd Dec 18
A Post-Powell View of USD, S&P 500 and Gold - 2nd Dec 18
Elliott Wave: SPX Decision Time Is Coming Soon - 2nd Dec 18
Junior Gold Stocks Q3’18 Fundamentals - 1st Dec 18
Little-Known BDC Stocks Thrive Amid Rising Rates and Earn Investors +7% Yields - 1st Dec 18
Ray Dalio: This Debt Cycle Will End Soon - 1st Dec 18
Bank of England Warns UK House Prices 30% BrExit Crash! - 1st Dec 18
Gold Fundamentals Improving but Not Bullish Yet - 30th Nov 18
What the Oil Short-sellers and OPEC Don’t Know about Peak Shale - 30th Nov 18
Global Economic Perceptions Are Shifting Imnplications for Stock Market - 30th Nov 18
The US Economy is Getting Worse. What this Means for Stocks - 30th Nov 18
Trailblazers Leading the Way in Online Reputation Management - 30th Nov 18
The Shift in Trend from Physical Printers to Online Printers - 30th Nov 18
UK House Prices 2019 No Deal BrExit 30% Crash Warning! - 30th Nov 18
Stocks Rallied, New Uptrend? - 29th Nov 18
The Fed Will Probably Stop Hiking Rates in 2019. What’s Next for Stocks - 29th Nov 18
Love. Fear. Inflation. A Precious Metals' Trifecta - 29th Nov 18
GBP/USD – Double Bottom or Further Declines? - 29th Nov 18
Stock Market Santa Rally Still a GO to Dow 27,000? - 29th Nov 18
UK Government and Bank of England BrExit Economic Armageddon Propaganda - 29th Nov 18
Why the Crude Oil Price Collapsed to $50 - 28th Nov 18
Gold Joins the Decline – the Earth is Shaking - 28th Nov 18
Watch This Picture As Asset Prices Fall - 28th Nov 18
GE’s Stock Price Crash Holds an Important Lesson About Investing - 28th Nov 18
5 Rules for Successful Trading - 28th Nov 18
Dollar Trend Imposes: EURUSD to Fall to 1.11 - 28th Nov 18
Gold, Original Money, Fiat Money - 28th Nov 18
When Will the Stocks Bull Market End? - 28th Nov 18
Looking ahead: Why the Smart Money is Investing in Green Energy - 28th Nov 18
The Yield Curve Will Invert Soon. What’s Next for the Stock Market - 27th Nov 18
Silver Trading and the Hands of a Broken Clock - 27th Nov 18
What's Inside SMIGGLE Christmas Advent Calender 2018 - 27th Nov 18
Investing in Recession Proof Trailer Parks - 27th Nov 18
The Advantages and Disadvantages of Debt Consolidation - 27th Nov 18
GDX, This Most-Hated Stock Could Return You 140% in Just a Few Months - 27th Nov 18

Market Oracle FREE Newsletter

How You Could Make £2,850 Per Month

Silver SLV ETF Bull Market Remains Intact

Commodities / Gold & Silver Aug 20, 2008 - 09:23 AM GMT

By: Chris_Vermeulen

Commodities


Best Financial Markets Analysis ArticleSLV ETF Trading - Panic, Shouting & Media Hype!

It's all too easy to lose yourself and your position under emotional strain.

Let's face it, it's hard to think straight when a voice inside your head is screaming GET ME OUT OF HERE!


And don't think emotional reflexes are the preserve of amateur's only. Professional Money Managers are certainly not immune to panics, especially since they are judged on much shorter timeframes and scrutinized intensely against benchmarks and peers.

That said we find 2 trading techniques help us to sit tight with our positions:

1 – Never bet the Farm.

2 – Remain focused on the big picture at all times.

Regarding rule 1: The winner in investing is the one who stays in the game the longest. No matter what kind of slam dunk you think you've got, DON'T go betting the farm, strange things happen under the Sun! The last thing you want to do is take a loss that takes you out of the game PERMANENTLY. Size your positions accordingly.

Regarding Rule 2: The best way (we find) to remove emotions from the picture is to keep an Eagle eye on the charts. And here we find it best to start with longer dated monthly charts which give us a sense of where price action has been.

Take our current favourite – Silver or SLV the Silver Bullion ETF:

Figure 1 - SLV ETF monthly still in long-term uptrend

http://stockcharts.com/c-sc/sc?s=SLV&p=M&st=2000-08-19&i=t87764260790&a=149023461&r=8736

Some noteworthy items:

* SLV etf has been in a bull market since 2001 and the price has risen by 5X.

* Since 2002 the 3 rd and 4 th quarters of each year have been strong for SLV.

* The current correction is similar in magnitude to the early 2004 correction.

* Throughout all gut wrenching corrections, the price has remained above the blue uptrend line.

* The price is now at significant support in the form of the abovementioned uptrend line; horizontal support (second blue line) and 50 Month Moving Average (red circle).

Synopsis: Whilst it is impossible to say whether support will hold (we discuss the fundamentals below) we do think the current level offers an excellent entry point once we have a low risk setup in our trading model.

Let's take a closer look:

Figure 2 - SLV ETF Weekly Chart

http://stockcharts.com/c-sc/sc?s=SLV&p=W&b=5&g=0&i=p04767543995&a=149023461&r=4031

The takeaways from the above chart:

•  The SLV double top in July ($19.17) was difficult to identify because it was somewhat short of the exuberant $20.73 reached in February. However the extreme divergence in the RSI (top) and MACD (bottom) was an early sign that SLV had topped out.

•  Once the price dropped below support at $16 (blue line and 50-week moving average) the chart painted a technical target of around $12 (lower blue line).

•  The correction has followed a classic Elliot Wave A-B-C (marked above) where the magnitude of wave C equals Wave A and once again paints a target for SLV of $12 (red circle).

•  In addition to representing a technical correction target, $12 is strong support on the monthly chart (figure 1) as well as the August 2007 bottom and 200-Week Moving average.

•  We would be amiss if we didn't point out that $12 has not been reached just yet.

And finally, to round off the picture lets zoom in on the daily chart for SLV:

http://stockcharts.com/c-sc/sc?s=SLV&p=D&b=5&g=0&i=p27356362623&a=149023461&r=1820

Figure 3 - SLV ETF Trading Chart, Daily

Noteworthy items here are the 2 gap down events (blue circles) and the potential double bottom in the RSI (top).

The rationale behind gap events in technical parlance is that markets HATE a vacuum and usually end up backing and filling the gaps – at least that has been our experience.

The double bottom on the RSI is a hopeful sign that the downward price action is decelerating.

Long-Term Fundamentals for SLV

The fundamentals are probably even more bullish now than before the sell-off (we know that's no consolation). Supply remains slow coming on-stream as new mines take months and years to get up to full production.

On the demand side, if you believe (as we do) that Precious Metals (Gold and Silver) are the antithesis of financial paper assets. And the institutions who are bastions of those financial assets remain seriously encumbered, with more to come, then you'd agree that the demand for SLV will remain robust.

Anecdotally, the Silver Bullion dealers we have spoken to all tell us that demand for Physical Silver (of which SLV is the ETF) has actually increased since the sell-off and Silver Rounds and Bars are hard to come by.

To conclude: Technically we are near a buy zone for SLV. Whilst we may yet go down to test $12 we are now close enough to the Buy Zone for probabilities to be skewed in our favour. WE will be looking at SLV at these prices over the next few weeks for a possible entry!

More commentary and stock picks follow for subscribers…

By Chris Vermeulen
Chris@TheGoldAndOilGuy.com

Please visit my website for more information. http://www.TheGoldAndOilGuy.com

Chris Vermeulen is Founder of the popular trading site TheGoldAndOilGuy.com.  There he shares his highly successful, low-risk trading method.  For 6 years Chris has been a leader in teaching others to skillfully trade in gold, oil, and silver in both bull and bear markets.  Subscribers to his service depend on Chris' uniquely consistent investment opportunities that carry exceptionally low risk and high return.

This article is intended solely for information purposes. The opinions are those of the author only. Please conduct further research and consult your financial advisor before making any investment/trading decision. No responsibility can be accepted for losses that may result as a consequence of trading on the basis of this analysis.  

Chris Vermeulen Archive

© 2005-2018 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

6 Critical Money Making Rules