Followers | 686 |
Posts | 142976 |
Boards Moderated | 35 |
Alias Born | 03/10/2004 |
Monday, July 11, 2016 12:54:44 PM
* July 10, 2016
The long-term outlook for silver is very positive indeed, but over the short to medium-term it looks set to react.
On its short-term 3-month chart we can see that, after rising sharply late last month, a sizeable bearish “shooting star” appeared on the chart on heavy turnover at the start of this month, at a time when silver was critically overbought, which indicates a high probability that silver will react back soon.
On the 6-month chart we can see why silver might react back here – it has just arrived at the top of an expanding uptrend channel in a very overbought state. Thus, a reaction back looks likely, and this would be a healthy development that sets it up for the next upleg. Given the current COT structure it would not be unreasonable for it to drop back to the support shown in the $18 area over the short to medium-term.
The long-term 10-year arithmetic chart gives us a much broader perspective. This is actually a very positive chart overall, for as we can see silver’s bearmarket phase from 2011 has definitely ended. However, it has risen quite sharply in recent months to arrive at a zone of significant resistance, so it would be quite normal for it to consolidate or react back here, before breaking above this resistance and continuing higher.
Silver has also broken out to start a new bullmarket on its 10-year log chart…
As with gold, Commercial short and Large Spec long positions in silver have built up to a very high record level, making a reaction back soon a high probability…
The COT chart shown above, which only goes back a year, probably doesn’t drive home just how extreme the current situation is. If not, then the following chart should get the job done. The long-term Hedgers chart shown below, which is a form of COT chart, shows that Hedgers positions are now at frightening bearish extremes. When the reading reaches the red dotted line it is at a normal bearish extreme, which often, but not always, leads to a drop in the silver price. When the reading is way below it, as now to an unprecedented extent, the situation is critical, and please note that I didn’t create this chart, sentimentrader did, and they are not known for being anything other than totally objective.
Chart courtesy of www.sentimentrader.com
The silver optix or optimism chart shows that bullishness towards silver is now at extreme levels, and while this doesn’t always lead to an immediate reversal, taken together with the other factors that we have observed, it does suggest that caution is in order with respect to silver’s immediate prospects.
Chart courtesy of www.sentimentrader.com
Your reaction to all this depends first of all in whether you follow the logic of it and agree with it or not, and secondly on what sort of investor or trader you are. If you are a long-term investor, you may simply decide to ride out any correction, but if on the other hand you are aggressive trader, you may want to cash in longs and even consider opening some shorts in the sector, but whichever, it still looks like a good idea to take some money off the table here if you are long the sector, taking advantage of the comparatively high prices now prevailing.
http://www.clivemaund.com/article.php?art_id=67
• DiscoverGold.
Click on "In reply to", for Authors past commentaries.
Information posted to this board is not meant to suggest any specific action, but to point out the technical signs that can help our readers make their own specific decisions. Your Due Dilegence is a must!
• DiscoverGold
Recent GOLD News
- Porgera Remains On Track Despite Mulitaka Landslide Challenges • GlobeNewswire Inc. • 07/25/2024 11:00:00 AM
- Higher Q2 Production Puts Barrick On Track to Deliver 2024 Targets • GlobeNewswire Inc. • 07/16/2024 11:00:00 AM
- Barrick Continues to Invest in Mali • GlobeNewswire Inc. • 07/09/2024 07:00:00 PM
- Exploration Success, Capital Investment and Reserve Growth to Sustain Kibali’s Production Profile • GlobeNewswire Inc. • 07/02/2024 04:00:00 PM
- Barrick and Zijin Contribute $1 Million to Support Papua New Guinea Landslide Victims • GlobeNewswire Inc. • 06/07/2024 11:18:39 AM
- Form SD - Specialized disclosure report • Edgar (US Regulatory) • 05/29/2024 08:01:04 PM
- Barrick’s Sustainability Strategy Delivers Real Value to Stakeholders • GlobeNewswire Inc. • 05/15/2024 11:00:00 AM
- Barrick Announces Extensive Exploration Partnership with Geophysx Jamaica • GlobeNewswire Inc. • 05/01/2024 10:15:00 AM
- Barrick to Ramp Up Production As It Remains On Track to Achieve 2024 Targets • GlobeNewswire Inc. • 05/01/2024 10:00:00 AM
- Barrick Declares Q1 Dividend • GlobeNewswire Inc. • 05/01/2024 09:59:00 AM
- Barrick Announces Election of Directors • GlobeNewswire Inc. • 04/30/2024 08:15:55 PM
- Barrick On Track to Achieve 2024 Targets • GlobeNewswire Inc. • 04/16/2024 11:00:00 AM
- Notice of Release of Barrick’s First Quarter 2024 Results • GlobeNewswire Inc. • 04/09/2024 11:00:00 AM
- Strategy-Driven Barrick Builds on Value Foundation • GlobeNewswire Inc. • 03/28/2024 09:20:38 PM
- Barrick Hunts New Gold and Copper Prospects in DRC From Kibali Base • GlobeNewswire Inc. • 03/20/2024 02:00:00 PM
- Barrick Opens Academy at Closed Buzwagi Mine • GlobeNewswire Inc. • 03/18/2024 08:00:00 AM
- Barrick to Grow Production and Value on Global Asset Foundation • GlobeNewswire Inc. • 03/15/2024 11:53:01 AM
- Loulo-Gounkoto Delivers Another Value-Creating Performance • GlobeNewswire Inc. • 03/10/2024 10:00:00 AM
- Passing of the Right Honorable Brian Mulroney • GlobeNewswire Inc. • 03/02/2024 01:17:35 AM
- Kibali and DRC Partner to Promote Local Content • GlobeNewswire Inc. • 03/01/2024 02:22:43 PM
- Tanzanian Parliamentary Committee Lauds Barrick’s Work at North Mara • GlobeNewswire Inc. • 02/23/2024 12:00:00 PM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 02/14/2024 10:28:08 PM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 02/14/2024 08:05:25 PM
- Clear Strategies and Strong Partnerships Set Barrick Up to Outperform, Says Bristow • GlobeNewswire Inc. • 02/14/2024 11:00:00 AM
- Barrick Announces New Share Buyback Program • GlobeNewswire Inc. • 02/14/2024 10:59:00 AM
Glidelogic Corp. Announces Revolutionary AI-Generated Content Copyright Protection Solution • GDLG • Jul 26, 2024 12:30 PM
Southern Silver Files NI43-101 Technical Report for its Updated Preliminary Economic Assessment for the Cerro Las Minitas Project • SSV • Jul 25, 2024 8:00 AM
Greenlite Ventures Completes Agreement with No Limit Technology • GRNL • Jul 19, 2024 10:00 AM
VAYK Expects Revenue from First Airbnb Property Starting from August • VAYK • Jul 18, 2024 9:00 AM
North Bay Resources Acquires Mt. Vernon Gold Mine, Sierra County, California, with Assays up to 4.8 oz. Au per Ton • NBRI • Jul 18, 2024 9:00 AM
Nightfood Holdings Signs Letter of Intent for All-Stock Acquisition of CarryOutSupplies.com • NGTF • Jul 17, 2024 1:00 PM