$GLD / $SLV Resistance Now Support - Bullish for $Gold$GLD / $SLV Resistance Now Support - Bullish for $Gold
SLV
Risk-Off Would Equal a Big Bounce for Gold/Silver RatioWhile we have a $50 target for silver by the end of 2021, we fully expect it to get smacked in risk-off environments given its importance to industrial activity. When investors are optimistic, silver trades like copper; when they're scared, it trades more like gold. It's had a great run here and while we fully expect to see the ratio get back below 80 in time, gold should outperform silver in the very short term.
$GLD / $SLV Resistance Now Support - Bullish for $Gold$GLD / $SLV Resistance Now Support - Bullish for $Gold
Gold is running ahead of Silver and that means, silver has to play catch up.
Both gold and silver have nicely broken out of the wedge/triangle pattern and are slated to go higher.
You can see from Chart that Gold has gone up way ahead of Silver , leaving a wide margin for Silver to play catch up. At current price, I think it is still cheap and it has a good long term bullish chance to rise higher.
Silver Destined to Break Multi Year ResistanceWhat a time to be a trader...and what a day! U.S. markets gapped up and held their gains throughout todays session after Moderna, Inc. reported positive phase 1 results of a potential Covid-19 vaccine. Could it really be that simple for the bulls? It'll be interesting to see how the market reacts when the Fed Chair Jerome Powell speaks at a scheduled Senate hearing tomorrow. Perhaps the Dow rips another 1000 points or maybe, just maybe the long side is getting too crowded? More on this on upcoming posts. Today, I wanted to go over Silver .
It's Happening!
Yes, we told you so! More than a week ago we mentioned how Silver could potentially begin to out perform Gold in the coming weeks. Well, it has! Already out performing Gold by nearly 10% since last Thursday. Sure, Gold is up significantly over the last year but, the reason why I am so excited is because Silver could just be getting started. Want the proof? Let's take at some charts below.
Above is the daily chart of Silver. Currently Silver is getting rejected off a six month cluster of resistance. It wouldn't surprise me if price took a breather before heading higher. RSI is approaching overbought levels, so any price action higher would lead to bearish divergence potentially requiring resolution. Stacking bids at the support highlighted would serve as optimal entires.
Next, is the weekly chart of silver (see below). Notice how I have't updated resistance #1 . Yes, we broke above it, but we haven't had confirmation of support. This will likely end up being support but in trading you never take things as 100% certainty.
I also added a comment in between stating that the current range silver is trading within could be considered a no trade zone. What I am getting at is not to FOMO . Be smart on your approach. Let price consolidate and provide us with clear entries. With that said, if Silver does continue to rip higher, a daily close above the resistance #2 which coincides with a major descending trendline could be a breakout entry. Of course, practice good risk management by using stops.
The most bullish signal in more than a decade may be on the monthly chart below.
Above, you'll see the last two instances when Silver was either at or crossing the 20 SMA and experienced a bullish MACD cross within the positive territory. Yup, It's happening again! Will history repeat itself? I am betting that it will. Bias: Bullish .
More than Silver
Alternatives to buying Silver are ETFs and also silver miners. I'll be touching up these stocks in upcoming posts.
Have a great evening and happy trading!
SILVER: potential bearish ABCD pattern. Retrace almost DONE!SILVER: potential bearish ABCD pattern. Retrace almost DONE!
Define stops according to your risk profile.
SIlver (USD)- Monthly chart. Must break out of downslopping chanSIlver (USD)- Monthly chart. Must break out of down-slopping channel (pink).
Sadly, hasn't even retraced past the 23.6% Fib Retracement from the 2011 highs.
Silver (USD)- clearly has a lot of work to do to recover from the blow off top of 2011.
Silver (AUD)- Monthly chart. Forming Double bottom.Silver (AUD)- Monthly chart. Potentially forming a Double bottom.
Note over head resistance (yellow line)- 4 failed previous attempts.
Yellow line also coincides with 38.2% Fib retracement from the 2011 highs. So a very important line to break to complete Double bottom.
BREAKTHROUGH The iShares Silver Trust (the 'Trust') seeks to reflect generally the performance of the price of silver.Silver exchange-traded funds (ETFs) closely track the price of silver and are generally more liquid than owning the precious metal itself. Like other precious metals, silver ETFs are favored by investors seeking a hedge against inflation or a safe haven in times of market turmoil. Their Stock chart value said to bullish $15.3. Silver now a days potentially in demand This market is just so fantastic.Wanna Know More About Bullish Strategy READ MORE:
Gold to Silver Ratio FallingThis ratio shows the amount of silver it takes to equal one ounce of gold in price. When the ratio is rising it means that gold is outperforming silver; when the ratio is falling it means that silver is outperforming gold.
The gold to silver ratio is currently at 106 and falling after hitting an all-time high of 126:1. The average ratio in modern times is about 50:1, with the long-term historical average dating back 5,000 years being closer to 15:1. In recent times, 80:1 was about the peak we would see in the ratio before it would fall again, so the recent jump to 126 was more than likely a once-in-a-lifetime event as silver became severely undervalued compared to gold.
The chart currently shows three yellow price candles which indicates that extreme bullish volatility was experienced in the move up as gold outperformed silver. This was most likely due to investors fleeing to gold due to its main function being a store of value, while silver failed to see the same gains due to it mostly being an industrial metal, and since global production has dropped off during the virus outbreak silver was not in high demand. That trend appears to now be shifting in silver's favor due to the extreme disconnect in the ratio.
The three yellow price candles show a strong move up on the first yellow candle, followed by a second yellow candle with a small body and long lower wick, and now the current price candle is retreating. This three-candle pattern resembles a hanging man reversal candle pattern with the second yellow candle being the hanging man candle. This occurs when the price of an asset sees high demand, and then a sudden pause as traders become indecisive, followed by a reversal. This pattern tends to mark the top of price advance, and since we are looking at the gold-to-silver ratio it likely means that we have seen the end of gold outperforming silver, at least in the short-term, and can expect silver to now begin to outperform gold.
The expected move going forward is a decline in the ratio back to 80:1, and more than likely being followed by an undershoot back down to 50:1. If you're playing precious metals, now would be a good time to go heavier in silver trades and then convert back to gold when the ratio hits 50:1 or lower.
