Is a pullback to $22 imminent?

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bernard
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Is a pullback to $22 imminent?

I think we are starting to see the inklings of a long-term viable rally here, but the short-term prospects aren't looking good with stiff resistance at the $23.30 level. Dollar index also looks poised to rally here, and the GDX mining etf is diverging from the underlying pretty blatantly.

Check more charts here: https://comparesilverprices.com/metals/silver-23-dollars-will-it-hold/

Thoughts?

Edited by admin on 11/08/2014 - 06:08

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wrs
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Overnight dip has been bought

Coming in higher than yesterdays close.  So it looks like bulls have some support outside US trading hours also.  This is a pretty epic struggle here.  Probably more upside than downside risk but I still don't like the double gap under SLV, it's not a healthy start for a rally but the HUI doesn't have any.   Yesterday was a good correction, time to buy GDX or your favorite miner today I think.

Not sure if it makes it to 260 which was my preferred entry point but it is trying to get through 280 after filling the gap up there.  There is another gap at 300 which is the next logical target.

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forecasting

Forecasting is  really a tricky game isnt it.

you caught the  support at 260 but the elliott wave was showing  it as a wave 4 pullback, then the little rally turned out to be a truncated wave 5 that whipsawed into the down wave we see happening now...and the 50 MA (daily chart) looks like an easy target to see. even lower to 230 is possible as the real pulback...... I might  look for some bargains  if HUI  falls back to 230-240 area

but the HUI ,like the GDX is not a good   chart to use in  deciding whether to buy and sell individual miners.  different miners  performed very differently in this   first wave rally off the june bottom.  its not all one big miner blob.

I would never buy Barrick but I do like AUY.

The pullback in silver from 25 ....   well, the daily 50 MA is at 20.63 that looks like a fair target to me. maybe  21 area. pivot points around there.  that would be a real pullback

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Not forecasting

Just drawing lines and looking at resistance and support in an effort to inform myself where the trading opportunities are.  I use it because I have followed it for years and it tracks NUGT and DUST though not exactly as they are designed to track the GDM.  Not that it matters that much.  I trade in and out of things all day long and HUI is one of the things I pay attention to because the miners I buy and sell are part of it.   Here is the updated 1om chart and an hourly.  Notice that the channel was the more important feature and that the failure at 280 caused a return to the channel.  Notice also that the buy this morning at 250 was easily deduced from both the 1h and the 10m.  On the 10m it was the bottom of the channel and on the 1h, it was below 30 on the RSI, a high probability of inflection point there.  I find channels tend to be more useful than trying to guess what wave this is.  It's all just guessing though, unless you have enough money to influence the market and I don't.

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updated silver chart

It has failed at the downtrend line from last fall.  Not surprising though since you usually only get through one resistance level on a move and this move has broken two in my view.  The first one was to get through the February downtrend and that was done decisively, then it didn't waste much time breaking through the 22-23 level and getting up above the bounce from last April.  All of that action is pretty bullish but not enough to say that silver has bottomed.  Silver is still in overbought territory but that is a good thing if it is to remain in a bullish mode.  It can stay there for a while longer if need be.  Currently it's trading in the green channel and should hit the bottom before moving up to challenge the fall downtrend line again.   I don't think it's going back to $22 at this point but it certainly could.   

The tell on silver's bullishness is how the RSI is remaining elevated.  Note that when it was crashing, the RSI remained at 40 or below most of the time.  Silver has maintained a daily RSI above 70 for nearly two weeks now and there isn't any reason to think it will drop below 50 if it does fall below 70.   Silver has a lot of room to move higher based on recent prices, i.e the last year.  The move above $25 should indicate where it wants to go.  That took place outside of US trading hours and when I see that, I make note of it because it is indicative of where the US price is eventually going.   In this case that is suggesting to me silver should get back up to $25 fairly soon during US trading hours.   I think that if it were to hit $22, the time to get back to $25 would be prohibitive.  To me, that kind of move is a telltale.

Right now I don't have any silver exposure at all, I am just giving you my view of it.  I traded AGQ once today for a gain from $24.76 to $25.10, in and out in half an hour or so.  I am not buying and holding anything other than the physical I have owned since 2002.

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silver finished on the channel

Will be interesting to see if the channel holds with a bounce on Tuesday.  The HUI was a disappointment today as it finished just under it's hourly 200ma and just under the long term decline channel.  That may be bad for Tuesday.

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I think silver will move

I think silver will move lower and I will sit out till debt negotiations in October. After that, if there is a visible dip, like 19-21, I think it will be time to go long stay long.

Once FED start taper-as they must, a soaking up collateral has negative effect on interbank lending-  game is over- someone ELSE will have to supply USD to keep economy afloat and inflate prices to increase velocity of money. My thinking-money issuance will be taken over by USG via some emergency power act for president+ increased tensions in the world. Both scenarios are PM positive, and long term. 

At the same time, cash transactions will be outlawed to the maximum possible extent. Like gold in 1933. Cash is like gold was before confiscation order based on emergency powers in 1933. Reason-e.g. tax evasion.

Same for gold, may be with some deviation in phase.

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Silver finished yesterday in the channel

Also right under the decline line from last fall.  This is where they want it to fail, if it is going to.  It's getting hammered this morning and of course under the guise of terrible Tuesday, there should be some damage today if it is to happen.  It is currently at $23.70.

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Silver working it's way over to the yellow uptrend line

Terrible Tuesday provided a takedown below $23 to $22.84.   The start of the rally was at $19 and it peaked at $25.10 or there about.  A 38% retrace should take silver back down to around $22.75 or so.  It either got there today or will make it tomorrow.  Silver may just bounce around for a couple of more days working it's way over to the yellow line before it bounces higher or falls lower.  The RSI is approaching 50 and I think it won't get below it before it bounces.   That should provide enough of a work off of the overbought conditions to allow silver to break through the fall downtrend line.  If it fails to do that, then this will just be another bounce on the way to the bottom.  A lot of wave 1 up moves retrace 75% of their gains which would allow the gap in SLV at $19.80 to fill.  I don't know if that will happen or not, it certainly is possible.

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Looks like $22 has been taken

Looks like $22 has been taken out. What are your thoughts here, wrs? We going to test $20?

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I will give it over the weekend

It failed the yellow uptrend line today and the RSI dropped below 50 by a large margin.  That isn't good.  If this was to be the start of some really bullish action, the RSI would stay over 50.  If it goes back to the bottom again, we will see those SLV gaps filled that I warned of several weeks ago.  I thought they would fill from a lower level but unfortunately, this is the way the metals are, they are far more of a disappointment than any kind of reward that lasts.  This is why I find the view that they are wealth preservers or stores of value so contradictory to the way they trade on a price basis.  

Truth be told, I made a lot more holding a stock for 40 years than I have holding gold for 15.  I was given 10 shares of Shell Canada Ltd in 1963 by my grandmother.  The price at the time was $10.  I had them called back in 2007 I believe it was for $12,500, they were 270 shares by then.  You can calculate the gain there.  My sister and I inherited my mothers part of what my grandmother gave her, it was 2700 shares (she got 100 shares originally).   That is hands down the best financial investment in anything that I have been part of in my life.  

Anyway, that aside, if those gaps get filled, we are back where we are started and silver hasn't bottomed and may go down to fill those other gaps that Strawboss says will never be filled.  I bought both AGQ and SLV today and they promptly dropped.  I got in at $21.30 and $21.20 and of course they are lower now.  The 50dma on silver is 21.38 so maybe that will be the bottom.   We will find out tomorrow or Monday I think.  Anyway, here is the chart. 

This looks like a correction of the entire move up from $18.  That was a $7 move and it's near the 50% retracement right now ($21.62).  If it does a 68% retrace which isn't surprising for initial bull moves off a bottom (because no one believes in them), then it will fall below $20.50.  A 75% retrace would be back below $20 which isn't out of the question at all.  What is really interesting about the drops in silver and gold the last couple of days is that the USDX has been dropping as well.  Kind of kills those people who claim there is some inverse relationship in the metals and dollar index.  It's all just numbers on a screen though.

The HUI channel has dominated, notice that it has been the most important feature since I first started drawing it nearly a month ago.  We may be near the bottom in the HUI correction as well.  The original bounce back out of the channel and the longer term decline channel were both destroyed pretty well.  However, the HUI is so near the lows it made 4 years ago, it doesn't have much room to go lower unless gold and silver go back down too.   If that happens, the HUI will end up at the bottom of the long term channel below 150.  In that event, this site and all others like it will be deserted I think.

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great charts and insight,

great charts and insight, wrs, thank you.

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wrs, thoughts here? it looks

wrs, thoughts here? it looks like a nice entry point especially given the strength of the metals and miners into the close today

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bernard wrote: wrs, thoughts

bernard wrote:

wrs, thoughts here? it looks like a nice entry point especially given the strength of the metals and miners into the close today

Took the week off after making my no taper bet last Thursday.  Didn't want to second guess myself and didn't want to hear all the negative talk that has been the norm of late.  Looks like we are back up against the fall decline line and above the yellow ascent line, in addition, the RSI is over 50.  So the stage is set for a move through the fall decline line to test the long term green decline line from 2011.  Could be an interesting fall now that the taper yip yap has died and the money printing will continue apace.  Seems like yesterday busted the PM shorts pretty hard.

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