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The monthly silver chart does not reflect what could be viewed as ending action for
the decline. If/as price rallies, it may be more of a futures selling opportunity than a sign of recovery. As the structure stands, odds favor lower price attempts.
So writes Michael Noonan (http://edgetraderplus.com) in edited excerpt from his original article* entitled Gold And Silver – Are You A Lion Or A Gazelle? You Had Better Know!.
(NOTE: This post is presented by Lorimer Wilson, editor of www.munKNEE.com and the free Intelligence Report newsletter (see sample here). The article may have been edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read.
Gold – What the Monthly Chart Says
April’s wide range with a close in the middle may contain price behavior within it for the next several months. If the range does not capture price for a while, any break is likely to be lower.
The down channel is often a good barometer for how price may react at each line. Price held the lower channel, even with the onslaught on naked short selling of unprecedented amounts of gold that was impossible to deliver, which was not the intent, anyway.
You can see how price rallies, since October 2012, became weaker and weaker, unable to approach the upper channel line. Use that as a measure to see how subsequent attempts to rally compare. Keep in mind, weak rallies lead to lower prices. Last week’s small range was not a sign of strength. Be wary of any rally ability to sustain itself.
Gold – What the Weekly Chart Says
We could see a reaction rally in the weeks ahead. If the ranges are small and volume declines, signs of a lack of demand, it can be a short-term selling opportunity in futures.
Silver: What the Monthly Chart Says
The monthly silver chart does not reflect what could be viewed as ending action for the decline. If/as price rallies, it may be more of a futures selling opportunity than a sign of recovery. As the structure stands, odds favor lower price attempts.
The chart comment speaks for itself. Depending on how price rallies back to the 26 area, it may be a clearer sign for shorting activity over the near term. The potential for shorting the market is for futures only and unrelated to one’s plan for buying physical gold/silver.
Silver: What the Weekly Chart Says
The preamble to the above excerpt has been edited and is presented here.
(Editor’s Note: The author’s views and conclusions in the above article are unaltered and no personal comments have been included to maintain the integrity of the original post. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.)
*http://edgetraderplus.com/market-commentaries/gold-and-silver-are-you-a-lion-or-a-gazelle-you-had-better-know
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Investors trust in the paper PM market is now starting to separate itself from their trust in the physical PM market, which I think is really good for personal investors because the paper market has now been proven to be easily “gamed” by the biggest players who have control over not only the posted PM values but also the ability to close trades quickly!
The physical PM market, on the other hand remains a much more level playing field for all. Sure there are those with very large holdings that can cause market movements, like in the 80’s, when the Hunt Brothers caused the Silver market to skyrocket but because the total about of physical Silver (and Gold) is “limited,” selling naked shorts will never have the same effect on the physical market. This separation in trading accountability could in itself create a new level of TRUST in physical PM’s (at exactly the time when more investors globally than ever before are worried about long term fiscal solvency), that if widely accepted would add to PM’s value both now and in the future!
Plus, the ability to have physical control over their PM holdings is important since that removes several layers of Trust in the “System,” which is required when using paper holdings in both PM’s and or currency.