Silver has been dragged down by extended correctionWe are in the first part of the second leg down.
Y=W around 15.60
Si1! (Silver Futures)
Silver (XAGUSD): Bullish pattern spotted.Silver (XAGUSD) is trading within a newly emerged Channel Up on the 1D chart (RSI = 60.617, MACD = 0.050, Highs/Lows = 0.2338) following the October 1st bottom just above the 1D Support Zone.
Both the 1D candle action and the RSI sequence resembles and October/ November 2018 fractal which delivered a strong rise once the Channel Up broke. Our advice is to take a careful long approach towards 19.000 - 19.500 moving the stop loss on the Higher Low of the Channel each time to limit the potential loss while keeping a maximum gain perspective.
Check out also how we expect its relationship with Gold to trade:
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Silver has nested Bullish structures and long term support.The flagpole and falling wedge formation is very visible on Silver and many of the silver tickers have many posts about this formation and so I think we will see a lot of people playing that technically. I believe there is a strong case for the development of an acceding triangle developing within the falling wedge, which we have just began to trade out off.
Acceding triangles are easy to see, but often are not the greatest of performers and the often get thrown back or bust. My linked silver post shows an acceding triangle that performed beautifully and then immediately dumped into the grave. Given the totality of what is going on with silver, negative interest rates, the falling dollar, I don't see Silver not performing to the upside in a sustained manner month over month. But these short term formation can still perform and proceed downward or bust outright. Things never go straight up and so the first place I would expect consolidation/retracement on the way up would be just shy of $19.
The chart to the right shows we have found support high on the EMA ribbon. There was an attempted break through in July/August of 2016 and that was not sustained but as we currently have nested bullish structures and a flag pole I have a high degree of confidence that we will reach most of the way to our $22 target. My other posts have detailed how the 1M and 3M bollinger bands are going to provide a lot of technical resistance on the way to the full flagpole target. But the flagpole target is over 20% away and paper traders should be quite happy with those gains. Silver investors should think about buying before the break out because these levels may, after a year or so, literally never be seen ever again.
Due to the very high possibility of continued negative interest rates around the world and soon within the United States I do not suspect we are in a situation shown by the shaded "X." Instead I think we are going to see a repeat of the Black and Green Arrows, only much faster. The first unsustained break of the EMA ribbon was in '97, and the second break which predicted the parabolic move was in '03. The fakeout to this current break are only three years apart, and I believe that due to the increase intervention in the market by the various central banks, on multiple levels, will see a multi-year parabolic move rather quickly.
My linked post will be showing how I will be using the bollinger band to take profits on the way up, and future posts may show how I am using the gold and silver ratio to try and chase whatever is moving faster after I take profits. All the usual disclaimers apply, as I am not a certified market technician nor a financial advisor.
Gold/ Silver ratio: One sharp fall left.The Gold/ Silver ratio is the proportional relationship between the respective spot prices of Gold and Silver. Put simply it describes how many ounces of silver can be bought with one ounce of gold.
The ratio has been on a bearish trend since early July as Silver initiated a very aggressive cyclical rise and despite the early September decline on both metals, Silver continued to be the strongest of the two.
Based on an identical pattern in 2016 when again the ratio was on a sharp bearish channel, we may have 1 more decline left before the downtrend is completed and the ratio reverses higher.
As you see both formations have had a Death Cross before the start of the final bearish leg and the 1D MA200 (orange trend line) acted as the Resistance. Even the RSI patterns are very similar and at the moment we are at the peak before the last fall.
Our advice is to shift your portfolio more into Silver and reverse when the RSI hits 30.00 - 25.00.
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THE WEEK AHEAD: GDXJ, SI1!, GC1!, CL1!EARNINGS:
Nothing is currently popping out on my screener that is highly liquid from an options standpoint and/or has ideal rank/implied metrics of >70% rank/>50% implied.
EXCHANGE-TRADED FUNDS
Pictured here is what is becoming a broken record trade in GDXJ (63/37) -- a 35/43 short strangle in the November cycle paying 1.12 at the mid price (.66 at 50 max). As you can see, the premium's where it's been -- precious metals and oil.
SLV (68/27)
GLD (64/14)
GDXJ (63/37)
GDX (62/32)
TLT (50/14)
USO (37/39)
XOP (34/40)
BROAD MARKET
SPY (28/17)
IWM (25/21)
DIA (21/17)
QQQ (21/21)
There's still a decent amount of time in the November cycle (40 days 'til expiry) to put something on in broad market if you missed the volatility pop last week.
SPY November 15th 279/305 (20 delta), 3.71 credit.
IWM November 15th 139/157 (18 delta), 1.97 credit.
DIA November 15th 251/276 (18 delta call, 19 put), 3.00 credit.
QQQ November 15th 177/198 (20 delta put, 19 call), 2.73 credit.
FUTURES
/SI (68/30)
/GC (64/14)
/6B (56/11)
/ZB (50/10)
/ZF (43/4)
/ZN (42/5)
/ZC (39/27)
/CL (37/40)
As with the exchange-traded funds, the volatility is in precious metals and oil. Although the ranks are high in the treasury complex, I'm not doing anything there due to the low background volatility, although I could see a bearish assumption directional shot in /ZN if we reach back to those 2019 highs.
VIX/VIX DERIVATIVES
I missed last week's 21.46 high to add bearish assumption, but we finished the week at 17.04, so another >20 VIX isn't out of the question.
Silver correction could be over. It could tag the former top.Silver could have completed the simple abc zigzag correction to accumulate another bullish momentum.
Watch breakout both of the trend line resistance and 50 on RSI.
Silver - Correction forming Parallel Channel - TargetSilver looks to be forming a descending parallel channel as price corrects from recent highs.
I'm not going to pretend I'm an Elliot Wave expert, but the move up was a bullish impulse wave. The ABC correction is forming a parallel channel, which we can use for a possible entry if price breaks lower. The target also aligns closely to the 50% fib level, which I have found to be a fairly common retest level before trend continuation with Silver. 0.5 Fib also comes in just below $17, strong psychological number.
End of the C would be the third touch of channel support and should coincide with the beginning f the next impulse wave up.
The blue dashed trend-line which price is currently testing is from swing lows on the weekly chart (higher time-frame trend-line are usually well respected). It may offer a little bounce, but it doesn't look like sellers are done yet.
Strong USD is keeping downward pressure on the metals. It's currently consolidating near YTD highs and isn't attracting a lot of selling.
Silver Consolidation after yesterday's selloffWaiting for Comex to open. Expecting more selling to break the range to the downside. AKA The Comex Smash.
Two targets marked lower where I plan to buy with a tight stop. Unlikely we don't get at least a small bounce from those levels.
The trend-line marked weekly support would be a big loss for bulls if they lose that support.
Bias is long unless the weekly support is broken....
Silver could breakdown to drop into 16-17 areaThe trendline was broken and retested at the 61.8% Fibonacci retracement level.
Watch breakdown of current corrective structure.
It could drop in between 16 and 17.
SILVER: New bull cycle or just a Lower High? See what to expect.A lot of discussion is going around on whether or not Silver has enter a new long term Bull Cycle. We are not against this possibility. But we thought it is useful to analyze also the scenario where XAGUSD is only on its way to a Lower High before diving even more on the long term and continue its multi year Bear Cycle.
On the three charts you see the current price action on the 1W time frame followed by Patter A which shows the price action mostly in the 1980s when Silver was still in the Bear Cycle, making only a Lower High and then Pattern B which shows the late 1990s - early 2000s when Silver broke into its last Bull Cycle.
All charts share some similar sequences: Peak (Lower High) on the Red Arrow Down, followed by a Channel Down (orange shape) and then accumulation after the bottom (eclipse shape). What followed in all charts is a very aggressive (non-stop) bullish 1W candle streak. What separates the patterns though and is the key in determining which phase Silver is currently at is the Golden Cross formation.
On Pattern A it took place after the aggressive rise made a peak (Lower High) and then Silver extended the Bear Cycle.
On Pattern B the Golden Cross took place before the aggressive rise made a peak. Then the price pulled back to the MA50, which held and supported Silver as it started its new Bull Cycle.
We have to say that on these terms, the current price action resembles Pattern A more, as the Golden Cross hasn't taken place yet. However it is not at all impossible to be replicating Pattern B as Silver may continue this parabolic rise so aggressively and make the Golden Cross on much higher levels.
We therefore would suggest investors to take a wait-and-see action and observe how the candle action will affect the MA periods.
* If the price currently pulls back and tests the MA200 then we are most likely still within the Bear Cycle and Silver will extend the downtrend.
* If it rises more and then pulls back to test the MA50 then we will most likely be starting a near Bull Cycle and investors can more safely enter into a long term trade.
We will be analyzing Silver on a more regular short/ medium term basis so stay tuned for more trading set-ups.
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Silver Weekly Fibonacci Levels Well Respected Target $19.60Throughout the recent rally in silver, you can see that Fibonacci levels have well respected at every level.
Pullbacks occurred at 0.236, 0.385, 0.5, 0.618, followed by a (sometimes short) period of consolidation.
0.786 ($19.60) will be a price level to watch, which may provide an opportunity to enter with trend on a pullback. If you follow this level back to 2016 you will see a cluster of candles that have weekly close price around this level indicating an area of significant resistance.
As of now, all fundamentals support a move higher in the long run. Gold / Silver ratio has started to break down, which I mentioned in a previous idea.
Silver - Bears desperate to protect weekly trend-line.You can see the battle over the blue dashed trend-line. This is an important trend-line from the weekly chart.
A daily close above this line would suggest a bullish breakout. $17.50 (previous high would be the next resistance)
Will post a weekly chart in the comments to show the trend-line I'm referring to.
DXY hitting resistance so I expect a move higher.
Price seems well supported even with DXY moving higher and near YTD highs....
Gold likely to push higherGold is working a continuation triangle, implying a move higher. At this point spike to 1550 is likely, but I still think we're due for some sorta temporary top
First Majestic Silver Corp Bullish Potential.The top silver stock has aggressively broken above a +2 year bearish Channel Down on 1W (RSI = 79.546) and showcases significant long term bullish potential. If a new Channel Up emerges on 1W then the Buy Zone is within 7.00 - 8.00. If the 1W Resistance break out aggressively then again the bullish potential will be even stronger. In both cases we will be going long.
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XAGUSD: Approaching the Sell Zone.Silver has had a hyper strong 4 day streak with 1D extending the Channel Up towards the 16.200 1W Resistance. The price is now trading on the most optimal long term Sell Zone. Short term traders can target the 15.550 4H Support while can extend to 15.000 and even lower depending on future fundamentals.
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XAGUSD: Important Resistance ahead. Trade accordingly.Silver broke above the 1D bearish (Lower High) trend line (dashed) effectively ending the medium term downtrend. 4H was currently rejection on the first major Resistance test (14.800 - 14.840). Failure to break this may result in a drop back to the accumulation zone (TP = 14.400) but a break above 14.840 should see Silver testing major 1D Resistances (TP = 15.300).
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XAGUSD: The only Buy Opportunity before the return to the bottomSilver is now trading around the 0.5000 Fibonacci retracement level on 1D with the chart being oversold (RSI = 32.316, STOCH = 18.561, STOCHRSI = 7.542) after the continuous decline since last week. This is the only level that we may see a rebound as if it doesn't hold the danger of a full pull back towards 14.000 is significant. We are long, TP = 15.470.
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DXY XAU - Relationship - SeasonalityI was using these charts to explain to a friend where the price of gold could be heading depending on USD course of action. Maybe someone will appreciate them. :)
I'm considering 1282.XX, today's low to be the bottom unless DXY breaks above the long term descending trendline. Started buying in around this price.
XPTUSD I bought at $836 along the same theory.
XAGUSD I'm holding out a little longer to $14.90 - $15.00 range.
