I find this very interesting as it is occuring against the backdrop of rising Treasury yields and a rising equity market. Clearly, for whatever the reason, something seems to be occurring on this inflation front that is moving below the radar screen of many investors. Could silver be sniffing out the first whiff of an inflation play?
Take a look at the following chart and note that the shorter term moving averages, the 10 day and the 20 day, are now trading either ABOVE the longer term 50 day or near par with it. This is a big change that has not been seen on this chart since early March of this year! That is quite astonishing! Keep in mind that hedge funds, while they remain overall net longs, have drastically reduced that position and had actually been adding some fairly large short bets. EVen with that, someone is buying this metal and very quietly pushing it higher.
Let's keep a very close eye on this as it could portend a strong upside move if it can solidly clear the overhead resistance noted on this chart, especially if it does that to end a week of trade.
Hi Ho Silver Away! Now if the bullion banks just play fair with the paper...And stop shorting the etfs too. Thanks Dan!
ReplyDeleteI think its not surprising as silver rises in tandem with gold amid falling US dollars as equities rally.
ReplyDeleteIf you zoom out to a 3 year chart, we are sitting on lower trend line which coincides with the 38.2 fib and flat macd with poor volume. If this level fails then no support till ~$18.
ReplyDeleteOn the bull side, descending wedge reversal pattern and the long sideways pent up energy.
My completely inexperienced (amateur TA) guesswork: not as much enthusiasm for silver here despite the incredible fundamentals. If the downside was less ominous this would be a no brainer long.
On COMEX the open interest in silver is still too high, which could be used to trigger a nasty sell-off. I'd like to see a OI of maybe 100K contracts, not the current close to 130K one. There are just as many naked longs as naked shorts in the future market.
ReplyDeleteI dont think there is such a thing as a naked long. A naked short means the seller doesn't have the actual metal for delivery
ReplyDeleteWouldn't a naked long be someone who owns the contract on leverage without the money to purchase the whole contract. Someone who is gambling on a rising price.
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