Best of the Week
Most Popular
1. Dollargeddon - Gold Price to Soar Above $6,000 - P_Radomski_CFA
2.Is Gold Price On Verge Of A Bottom, See For Yourself - Chris_Vermeulen
3.Dow Stock Market Trend Forecast 2018 - Nadeem_Walayat
4.Gold Price to Plunge Below $1000 - Key Factors for Gold & Silver Investors - P_Radomski_CFA
5.Why The Uranium Price Must Go Up - Richard_Mills
6.Dow Stock Market Trend Forecast 2018 - Video - Nadeem_Walayat
7.Jim Rogers on Gold, Silver, Bitcoin and Blockchain’s “Spectacular Future” - GoldCore
8.More Signs That the Stock Market Will Rally Until 2019 - Troy_Bombardia
9.It's Time for A New Economic Strategy in Turkey - Steve_H_Hanke
10.Fiat Currency Inflation, And Collapse Insurance - Raymond_Matison
Last 7 days
Gold – “Make Me Feel Good…Tell Me Anything” - 25th Sept 18
Sector Rotation Continues. Bullish for Stocks - 25th Sept 18
Whose Trillion is it Anyway? US Federal Government Shocker! - 25th Sept 18
Focus on the Stock Market’s Price Action and Ignore the Failed Hindenburg Omen - 25th Sept 18
5 Problems All Restaurant Owners Will Face - 25th Sept 18
Gold Price Trend Forecast 2018 - Video - 25th Sept 18
How the US Dollar Penalizes Emerging Asia - 24th Sep18
Stock Market Macro/Macro View: Waves and Cycles Part II - 24th Sep18
DJIA Makes New High  - 24th Sep18
Gold Price Trend Forecast 2018 - 24th Sep18
The Stock Market Has Been Exceptionally Strong this September. What’s Next for Q4 2018 - 24th Sep18
Gold / US Dollar Inverse Trend Relationship Video - 23rd Sep 18
US and Global Stocks, Commodities, Precious Metals and the ‘Anti-USD’ Trade - 23rd Sep 18
Gerald Celente Warns Fed May Bring Down the Economy, Crash Markets - 23rd Sep 18
Top 3 Side Jobs for Day Traders - 23rd Sep 18
Gold Exodus to Reverse - 22nd Sep 18
Bitcoin Trader SCAM WARNING - Peter Jones, Dragons Den Fake Facebook Ads - 22nd Sep 18
China Is Building the World’s Largest Innovation Economy - 21st Sep 18
How Can New Companies Succeed in the Overcrowded Online Gambling Market? - 21st Sep 18
Golden Sunsets in the Land of U.S. Dollar Hegemony - 20th Sep 18
5 Things to Keep in Mind When Buying a Luxury Car in Dubai - 20th Sep 18
Gold Price Seasonal Trend Analysis - Video - 20th Sep 18
The Stealth Reason Why the Stock Market Keeps On Rising - 20th Sep 18
Sheffield School Applications Crisis Eased by New Secondary Schools Places - 20th Sep 18
Precious Metals Sector: It’s 2013 All Over Again - 19th Sep 18
US Dollar Head & Shoulders Triggered. What's Next? - 19th Sep 18
Prepare for the Stock Market’s Volatility to Increase - 19th Sep 18
The Beginning of the End of the Dollar - 19th Sep 18
Land Rover Discovery Sport 'Approved Used' Bad Paint Job - Inchcape Chester - 19th Sep 18
Are Technology and FANG Stocks Bottoming? - 18th Sep 18
Predictive Trading Model Suggests Falling Stock Prices During US Elections - 18th Sep 18
Lehman Brothers Financial Collapse - Ten Years Later - 18th Sep 18
Financial Crisis Markets Reality Check Now in Progress - 18th Sep 18
Gold’s Ultimate Confirmation - 18th Sep 18
Omanization: a 20-year Process to Fight Volatile Oil Prices  - 18th Sep 18
Sheffield Best Secondary Schools Rankings and Trend Trajectory for Applications 2018 - 18th Sep 18
Gold / US Dollar Inverse Correlation - 17th Sep 18
The Apple Story - Trump Tariffs Penalize US Multinationals - 17th Sep 18
Wall Street Created Financial Crash Catastrophe Ten Years Later - 17th Sep 18
Trade Wars Are Going To Crash This Stock Market - 17th Sep 18
Why Is Apple Giving This Tiny Stock A $900 Million Opportunity? - 17th Sep 18
Financial Markets Macro/Micro View: Waves and Cycles - 17th Sep 18
Stock Market Bulls Prevail – for Now! - 17th Sep 18
GBPUSD Set to Explode Higher - 17th Sep 18
The China Threat - Global Crisis Hot Spots & Pressure Points - 17th Sep 18 - Jim_Willie_CB

Market Oracle FREE Newsletter

Trading Any Market

Gold, Silver, and USD Index - Three Important “Nothings”

Commodities / Gold and Silver 2018 Sep 13, 2018 - 06:05 AM GMT

By: P_Radomski_CFA

Commodities

Today’s analysis is going to be different than the other ones. We usually discuss what happened on a given day, week, or month and we elaborate on what it changed and what it didn’t change in case of the outlook for gold, silver, and mining stocks. But not today. Today, we are going to focus on what didn’t happen. At the first sight it seems that this means that there was no new signal. That’s not the case. The three important “nothings” that we will discuss in today’s article have important implications for the following days. That is if one knows where to look.

Let’s start with the first chart (charts courtesy of http://stockcharts.com).


Nothing Changed in the Gold:Silver Ratio

The gold to silver ratio broke above the 2003, 2008, and 2016 highs and it didn’t move back below them. In this case, “nothing” means that the breakout is being verified and with each passing day when the ratio is above the previous highs, the continuation of the rally becomes more and more probable.

Moreover, since the rallies in the ratio tend to be sharp, it means that we can expect the continuation of the move that’s very visible. This most likely means a big decline in silver.

No Changes in Silver

And by saying “no changes”, we mean practically no changes in terms of the daily closing prices. Silver moves back and forth on an intraday basis, but ultimately it still ends the session at about $14.15 - $14.20. At least that’s what we saw in the last 5 sessions.

That’s interesting, because this decline (and many other declines) are characterized by periods of very high volatility that are followed by periods of very low volatility and then the cycle repeats, with no “average volatility” weeks. The pauses that we saw previously took place in early July, late July and early August and then in late August (ok, in case of the latter the volatility was higher than previously).

Taking the above 3 cases into account, we see a very specific pattern. The lower the volatility before the move, the bigger the volatility during the move i.e. the more profound the decline is.

The biggest decline took place just before the middle of August and the back and forth movement that preceded it was the calmest period in many weeks and months. The only case when silver was calmer is… right now. Consequently, we may be just before the biggest short-term decline of 2018. And perhaps of the decade.

Still, knowing how silver likes to provide fake signals just before big declines, we wouldn’t be surprised to see a one final upswing that will get people unnecessarily excited. So, even if we see a sudden $0.50 rally shortly, it will not be a bullish signal by itself. Conversely, if such a move was accompanied by weak mining stock performance, it would be a perfect bearish confirmation. Naturally, such a brief rally is not something that we expect to see, but if it happened, it would not be surprising – it would be within the definition of “normal” in case of silver and its declines.

Overall, the current silver price projection is very bearish.

Still No Changes in the USD Index

Finally, we would like to emphasize that nothing really happened in case of the USD Index. It continues to trade back and forth above the neck level of the reverse head-and-shoulders formation. The formation is therefore active and has profoundly bullish implications. It indicates a move to 102 – 103, which will likely trigger a huge decline in the precious metals sector. As we discussed earlier this month, there are multiple other factors that point to the massive decline in the PMs and the situation in the USDX simply confirms them.
Summary

Summing up, it’s very likely that the pause in the precious metals market is over and the next big move down is already underway. We entitled our September the 4th, 2018 analysis Gold and Silver’s Stormy September. The current pause is most likely the naturally occurring calm before the storm. A profitable storm.

If you’d like to receive follow-ups to the above analysis, we invite you to sign up to our gold newsletter. You’ll receive our articles for free and if you don’t like them, you can unsubscribe in just a few seconds. Sign up today!

Thank you.

Przemyslaw Radomski, CFA

Founder, Editor-in-chief

Tools for Effective Gold & Silver Investments - SunshineProfits.com
Tools für Effektives Gold- und Silber-Investment - SunshineProfits.DE

* * * * *

About Sunshine Profits

Sunshine Profits enables anyone to forecast market changes with a level of accuracy that was once only available to closed-door institutions. It provides free trial access to its best investment tools (including lists of best gold stocks and best silver stocks), proprietary gold & silver indicators, buy & sell signals, weekly newsletter, and more. Seeing is believing.

Disclaimer

All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

Przemyslaw Radomski 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