Best of the Week
Most Popular
1. 2019 From A Fourth Turning Perspective - James_Quinn
2.Beware the Young Stocks Bear Market! - Zeal_LLC
3.Safe Havens are Surging. What this Means for Stocks 2019 - Troy_Bombardia
4.Most Popular Financial Markets Analysis of 2018 - Trump and BrExit Chaos Dominate - Nadeem_Walayat
5.January 2019 Financial Markets Analysis and Forecasts - Nadeem_Walayat
6.Silver Price Trend Analysis 2019 - Nadeem_Walayat
7.Why 90% of Traders Lose - Nadeem_Walayat
8.What to do With Your Money in a Stocks Bear Market - Stephen_McBride
9.Stock Market What to Expect in the First 3~5 Months of 2019 - Chris_Vermeulen
10.China, Global Economy has Tipped over: The Surging Dollar and the Rallying Yen - FXCOT
Last 7 days
Does Fed Know Something Gold Investors Do Not Know? - 21st Mar 19
Gold …Some Confirmations to Watch For - 21st Mar 19
UKIP No Longer About BrExit, Becomes BNP 2.0, Muslim Hate Party - 21st Mar 19
A Message to the Gold Bulls: Relying on the CoT Gives You A False Sense of Security - 20th Mar 19
The Secret to Funding a Green New Deal - 20th Mar 19
Vietnam, Part I: Colonialism and National Liberation - 20th Mar 19
Will the Fed Cut its Interest Rate Forecast, Pushing Gold Higher? - 20th Mar 19
Dow Jones Stock Market Topping Pattern - 20th Mar 19
Gold Stocks Outperform Gold but Not Stocks - 20th Mar 19
Here’s What You’re Not Hearing About the US - China Trade War - 20th Mar 19
US Overdosing on Debt - 19th Mar 19
Looking at the Economic Winter Season Ahead - 19th Mar 19
Will the Stock Market Crash Like 1937? - 19th Mar 19
Stock Market VIX Volaility Analysis - 19th Mar 19
FREE Access to Stock and Finanacial Markets Trading Analysis Worth $1229! - 19th Mar 19
US Stock Markets Price Anomaly Setup Continues - 19th Mar 19
Gold Price Confirmation of the Warning - 18th Mar 19
Split Stock Market Warning - 18th Mar 19
Stock Market Trend Analysis 2019 - Video - 18th Mar 19
Best Precious Metals Investment and Trades for 2019 - 18th Mar 19
Hurdles for Gold Stocks - 18th Mar 19
Pento: Coming QE & Low Rates Will Be ‘Rocket Fuel for Gold’ - 18th Mar 19
"This is for Tommy Robinson" Shouts Knife Wielding White Supremacist Terrorist in London - 18th Mar 19
This Is How You Create the Biggest Credit Bubble in History - 17th Mar 19
Crude Oil Bulls - For Whom the Bell Tolls - 17th Mar 19
Gold Mining Stocks Fundamentals - 17th Mar 19
Why Buy a Land Rover - Range Rover vs Huge Tree Branch Falling on its Roof - 17th Mar 19
UKIP Urged to Change Name to BNP 2.0 So BrExit Party Can Fight a 2nd EU Referendum - 17th Mar 19
Tommy Robinson Looks Set to Become New UKIP Leader - 16th Mar 19
Gold Final Warning: Here Are the Stunning Implications of Plunging Gold Price - 16th Mar 19
Towards the End of a Stocks Bull Market, Short term Timing Becomes Difficult - 16th Mar 19
UKIP Brexit Facebook Groups Reveling in the New Zealand Terror Attacks Blaming Muslim Victims - 16th Mar 19
Gold – US Dollar vs US Dollar Index - 16th Mar 19
Islamophobic Hate Preachers Tommy Robinson and Katie Hopkins have Killed UKIP and Brexit - 16th Mar 19
Countdown to The Precious Metals Gold and Silver Breakout Rally - 15th Mar 19
Shale Oil Splutters: Brent on Track for $70 Target $100 in 2020 - 15th Mar 19
Setting up a Business Just Got Easier - 15th Mar 19
Stock Market Elliott Wave Analysis Trend Forercast - Video - 15th Mar 19
Gold Warning - Here Are the Stunning Implications of Plunging Gold Price - Part 1 - 15th Mar 19
UK Weather SHOCK - Trees Dropping Branches onto Cars in Stormy Winds - Sheffield - 15th Mar 19
Best Time to Trade Forex - 15th Mar 19
Why the Green New Deal Will Send Uranium Price Through the Roof - 14th Mar 19
S&P 500's New Medium-Term High, but Will Stock Market Uptrend Continue? - 14th Mar 19
US Conservatism - 14th Mar 19
Gold in the Age of High-speed Electronic Trading - 14th Mar 19
Britain's Demographic Time Bomb Has Gone Off! - 14th Mar 19
Why Walmart Will Crush Amazon - 14th Mar 19
2019 Economic Predictions - 14th Mar 19
Tax Avoidance Bills Sent to Thousands of Workers - 14th Mar 19

Market Oracle FREE Newsletter

Stock Market Trend Forecast March to September 2019

Super Bullish Gold and Silver Set-Up Does Not Bode Well for the US Dollar

Commodities / Gold and Silver 2018 Sep 03, 2018 - 06:58 PM GMT

By: The_Gold_Report

Commodities

Technical analyst Clive Maund charts gold and silver and finds some positive signs. If you want to understand the great mass of investors, you don't need to spend hours reading a book written about a hundred years ago, the best way way to do it is to treat yourself to some time watching sheep. You can even make something of a vacation of it by going along to a sheep dog trial, such as the classic ones held on the English–Welsh borders in the heart of sheep country or in New Zealand. It's a fun day out and you can learn from chatting with the farmers, and more to the point, you can learn a lot about investors by watching the sheepdogs and the sheep—all you have to remember is that the sheepdogs are the Smart Money and the sheep represent the great mass of investors, the so-called Dumb Money. If you do go to the sheepdog trials on the English–Welsh borders, remember to tag on a day or two to visit nearby Hay-on-Wye, which is stuffed full of secondhand bookshops where you can find some great old books, and mercifully very few of them are written in Welsh.


Fortunately, we can readily identify the sheepdogs and the sheep on our COT charts, the sheepdogs are the purple bars on our charts, the Commercials, who take the other side of the trade from the sheep, who are the blue bars, the Large Specs. Let's now look at a pair of charts, a 1-year chart for silver itself with the COT chart stacked directly below it, which is for 1-year too, in order to see how the sheep are always wrong. As we can see the sheep, the Large Specs (blue bars) always have their biggest long positions at or just ahead of peaks in the silver price. This is not rocket science, is it? To assist you in grasping this, an appropriate number of right and wrong labels have been added to the chart. While the obvious conclusion from this is that the Large Specs are just plain stupid, dumber than the dumbest jackass, as pragmatic speculators we do not waste our time condemning them, rather, we simply make sure that we are the opposite side of the trade from these clowns, and if they are going short silver to a significant degree, as they did last week, then we are going to make darn sure that we are long.

If we are a little too early, and silver drops some more, then so what? The entire financial system is set to blow to smithereens before much longer, and the Emerging Markets collapse is just the start of it—the periphery is burning and the firestorm will soon spread towards the center. When that happens there are going to be "precious" few hiding places, and the Precious Metals sector will be one of the only boltholes around. Before leaving these charts it is also worth noting that the Commercials went long silver for the first time since 2001 last week, and if that isn't a sign of an imminent bull market, then I don't know what is. Incidentally, with respect to the classic 1948 goldbug film with Humphrey Bogart, "Treasure of the Sierra Madre," those of you who play casino slot machines may not realize that the refrain "Bonus? We don't need no stinking bonus!" that the "My Caramba" machine says in a thick Mexican accent when the bonus is cut short, is actually inspired by the "Badges? We don't need no stinking badges!" scene in the "Treasure of the Sierra Madre," but I digress. . .

The net Commercial Hedgers chart is also unprecedentedly bullish, as it shows that this is the first time during the life of this chart, i.e., for the past 25 years at least, that they have held a net long position: put simply it doesn't get any better than this.

. Chart courtesy of sentimentrader.com

The 6-month chart for silver shows recent action in more detail. On this chart we can see that last week's dip brought the silver price back close to its mid-August lows, with which it is suspected to be forming a small Double Bottom, and a bullish-looking "inverted hammer" candle appeared on Friday, so we might be right at the bottom here.

Finally, unlike back in the spring, gold's latest COT chart is also very bullish.

As mentioned on some of these charts, if the outlook for gold and silver is so positive, then it means that the dollar's "wrecking ball" rally is about done. So, after looking for evidence that it is, we have this:

This monthly chart for dollar proxy UUP shows a bearish monthly "shooting star" for the month of August and money flow becoming negative in recent weeks, indicating that Smart Money have been taking profits in dollar trades. It also shows a big ugly potential Broadening Top. According to this chart the dollar is about to turn lower. It is also worth noting that the Accumulation chart for UUP on its daily chart has been extremely weak on this rally.

The conclusion to all this is that the coast is clear to accumulate the precious metals sector—even if the sector drops more, it is unlikely to be by much. That's what Smart Money is already doing, and they are going to be sitting pretty and not have to give chase if the sector goes roaring up. At this juncture it is probably best in general to accumulate the large to mid-caps, since they are unlikely to drop much more if the sector grinds a bit lower, whereas as we know, some juniors can easily get another 30% lopped off their prices if the sector goes nowhere and there is no positive news out of the individual companies. We will accordingly be reviewing the charts for a range of large and mid-cap gold and silver stocks as a matter of priority going forward.

Disclosure: 1) Statements and opinions expressed are the opinions of Clive Maund and not of Streetwise Reports or its officers. Clive Maund is wholly responsible for the validity of the statements. Streetwise Reports was not involved in the content preparation. Clive Maund was not paid by Streetwise Reports LLC for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. 2) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports. 3) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article, until one week after the publication of the interview or article.

Charts provided by the author.

CliveMaund.com Disclosure: The above represents the opinion and analysis of Mr Maund, based on data available to him, at the time of writing. Mr. Maund's opinions are his own, and are not a recommendation or an offer to buy or sell securities. 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. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund's opinions on the market and stocks can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction.


© 2005-2019 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