Best of the Week
Most Popular
1. TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
2.Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
3.GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
4.Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
7.Stock Market - Should You Be In Cash Right Now? - 17th May 21
8.Gold to Benefit from Mounting US Debt Pile - 14th May 21
9.Coronavius Covid-19 in Italy in August 2019! - 13th May 21
10.How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Last 7 days
Junior Gold Miners: New Yearly Lows! Will We See a Further Drop? - 23rd Jul 21
Best Forex Strategy for Consistent Profits - 23rd Jul 21
Popular Forex Brokers That You Might Want to Check Out - 22nd Jul 21
Bitcoin Black Swan - Will Crypto Currencies Get Banned? - 22nd Jul 21
Bitcoin Price Enters Stage #4 Excess Phase Peak Breakdown – Where To Next? - 22nd Jul 21
Powell Gave Congress Dovish Signs. Will It Help Gold Price? - 22nd Jul 21
What’s Next For Gold Is Always About The US Dollar - 22nd Jul 21
URGENT! ALL Windows 10 Users Must Do this NOW! Windows Image Backup Before it is Too Late! - 22nd Jul 21
Bitcoin Price CRASH, How to SELL BTC at $40k! Real Analysis vs Shill Coin Pumper's and Clueless Newbs - 21st Jul 21
Emotional Stock Traders React To Recent Market Rotation – Are You Ready For What’s Next? - 21st Jul 21
Killing Driveway Weeds FAST with a Pressure Washer - 8 months Later - Did it work?- Block Paving Weeds - 21st Jul 21
Post-Covid Stimulus Payouts & The US Fed Push Global Investors Deeper Into US Value Bubble - 21st Jul 21
What is Social Trading - 21st Jul 21
Would Transparency Help Crypto? - 21st Jul 21
AI Predicts US Tech Stocks Price Valuations Three Years Ahead (ASVF) - 20th Jul 21
Gold Asks: Has Inflation Already Peaked? - 20th Jul 21
FREE PASS to Analysis and Trend forecasts of 50+ Global Markets by Elliott Wave International - 20th Jul 21
Nissan to Create 1000s of jobs with electric vehicle investment in UK - 20th Jul 21
Bitcoin Halvings Price Forecast and Stock to Flow Analysis - 18th Jul 21
Dell S3220DGF Unboxing and Stand Assembly - 32 Inch 165hz Curved Gaming Monitor Amazon Discount - 18th Jul 21
What Does The Fed Mean By “Transitory Inflation” And Why Is It Important To Understand? - 18th Jul 21
Will the US stock market’s worsening breadth matter? - 18th Jul 21
Bitcoin Halving's Price Projection Forecasts Trend Trajectory - 18th Jul 21
Dell S3220DGF Price CRASH to £305! 32 Inch 165hz Curved Gaming Monitor Amazon Bargain - 16th Jul 21
Google, Amazon and Netflix are Scrambling For This Rare Gas - 16th Jul 21
Sheffield Millhouses Park New Children's Play Area July 2021 Vs Old Play Area - Better or Worse? - 16th Jul 21
Inflation Soars, Powell Remains Unmoved. What about Gold? - 16th Jul 21
Goldrunner: Gold Could Jump To $1,900-$2,100 In Next 30 days – Here’s Why - 15th Jul 21
Tips For Finding The Right Influencers - 15th Jul 21
ECB Changed Monetary Strategy. Will It Alter Gold’s Course? - 15th Jul 21
NASA And Big Tech Are Facing Off Over This Rare Gas - 15th Jul 21
Will the U.S. Dollar Lose Momentum In the Second Half of 2021? - 15th Jul 21
Bitcoin Stock to Flow Model Forecasts Infinity and Beyond! - 14th Jul 21
Proteomics: The Next Truly Massive Investing Opportunity - 14th Jul 21
Massive Solar Storm to Hit Earth 2025, Coronal Mass Ejection (CME) Danger and Protection Solutions - 14th Jul 21
Is This The Best Way To Play The Coming Helium Boom? - 14th Jul 21
Meet SuperMania and its Ever-Present Sidekick, SuperMeltdown - 14th Jul 21
How NFTs Are Shaking Up Arts Trading - 14th Jul 21
Gold: High Time to Move Out of the Penthouse - 13th Jul 21
Climb Aboard! Silver Should Run Up To $38 In Next 30 Days - 13th Jul 21
How Will Remote Work Impact the U.K. economy? - 13th Jul 21
Why Helium Stocks Are Set To Soar in 2021 - 13th Jul 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Can Silver Hold $23 ? $26 Should

Commodities / Gold and Silver 2013 Sep 08, 2013 - 07:00 AM GMT

By: Michael_Noonan

Commodities

The silver situation continues to grow more positively, based on developing market activity. Almost everyone has an opinion, but they are all subservient to whatever the market dictates with its most current and most reliable information. It is then a matter of reading the message. Sometimes it is very clear, sometimes not.

The resistance for silver at $26 is uppermost on the mind of everyone with any degree of awareness for this market. A lesser market message, but one still quite clear was the lesser resistance from a demonstrated failed swing high retest back in April.


The new swing high in August closed poorly, the market advertising the likelihood of a correction to follow, as one did. We took no defensive action on this, at the time, with the "belief" that $26 would be the more important area from which to respond, and the activity for silver was developing positively. The point is, even though the market gives out important information, it is not always heeded, for a variety of reasons. For the most part, many do not even "see" the "message."

The TR box on the left shows how price failed to overcome $23 at the end of May and early June. There was an indication of how $23 could be important when price held that level, earlier in April. Broken support becomes resistance. The second, smaller TR box at the right shows that $23 was traded above/below for six TDs before rallying strong above the TR, making it support, once again.

The upside breakout gap is shown as a measure of potential strength underlying presently developing market activity. The sharp volume increase on the first TD in September is likely to be further defended by buyers, and it was. The question posed, will $23 hold?

A look at the intra day for a possible answer.



The starting point for this scenario was 23 August, when silver had a breakout from a wedge formation on exceptionally strong volume, [shown on the 3rd chart]. Whenever there is high volume behind a breakout, it will be defended on any retest, as those who bought, at the time, want to protect their purchases.

The first retest came on 1 September. There was an effort for price to go lower, but it failed, evidenced by the market's ability to respond with a strong rally. This is an example of the HOW a market responds to a known support/resistance area, and it gives us added information from newly developing market activity that $23 is holding very well.

The failure rally of the 28th, in between, had a secondary retest right after the S/D wide range bar lower, and that little retest effort failed at just under $24.60. Its importance became evident when price contained another attempt at that level, early in September. This created a small TR between 24.55 and 23.

There were two more attempts to break support at $23 on Thursday and Friday, and both failed when, for a period of time, $23 looked like it would not hold. The increased volume sell off on the 5th became pivotal on the 6th when another retest was failing to confirm the attempted break. You can see the high volume rally that created a collective sigh of relief for silver longs, at that point.

What makes that strong rally bar even more significant was the bar just before it. It had all the appearances of a potentially failed rally, followed by a poor close that looked like new lows were eminent. That would be a legitimate opinion, at the time, but the market does not care what we think. It will do what it will do, regardless of anyone's opinion.

For now, silver is in a small trading range, and $23 has held. This can change on Monday, if silver were to sell off under $23. We do not know, nor do we have to know. All anyone can do is deal with the available information in the present tense. If new, future market activity alters that view, we get to deal with it then, and respond accordingly.

If that little bar just prior to Friday's strong rally tells us anything, it is to wait for confirmation before acting. Had we determined silver was about to break under $23, by the looks of that bar, and acted on it, we would have missed out on the rally, just a few minutes later. This is why we always say to follow the market, not lead it.



This chart of the then lead month, Sep, is included to show how the breakout on the 23rd occurred on very strong volume. It was a pivotal piece of information, and still is.


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

© 2005-2019 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