Gold And Silver; Past, Present And Future Swings

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 |  Includes: GLD, SLV
by: James P. Montes

Summary

New lows rejected.

A combination of various cycles (short-term, intermediate and long-term) point to a low during this time frame.

A close above 19.47 would trigger the weekly uptrend.

On Monday May 12 the silver market tested weekly support levels of making a low of $19.05. This weekly low was rejected and caused a sharp swing rally back up to the levels of resistance anticipated in my last report and making a new weekly high of $20 per ounce on May 14.

In this report I made the following statement :

"If we can get silver to reverse higher from here next week, we could see a surge of energy unfold towards the weekly resistance levels of 20.60 to 20.80 by the second half of May."

With the weekly high of $20 per ounce, the silver market gave us a perfect set up to liquidate our swing long positions placed at $19.12 on Friday May 9 into the target zone provided in my last report.

Echoing my comments I said:

"Look to take some profits on longs, as we reach the 19.61 - 20.05 levels during the week."

This swing trade captured and recorded gave us the opportunity to lock in a solid .50 cent gain per futures contract (5000 oz.) or a $2500 profit each.

On Friday the market closed at $19.35 after challenging once again the previous weekly lows of $19.05 made earlier in the week. This reaction lower after testing the weekly resistance 20 levels, it completed the swing low objective and thus triggered another Buy signal on the close above $19.33. Friday's close more than confirms the next bullish swing trading pattern indicating another test of the $20 - $20.50 weekly resistance levels in the coming week. This area serves as a target zone to liquidate the long swing trade activated on Friday at 19.36. Use the weekly close below $19.33 as a protective stop. If stopped out re-enter longs between the $18.90 and $18.62 levels and use the weekly lows as a stop loss if activated.

In my last report I also made the additional comment:

"This is a very exciting period when we have a combination of cycles (short, intermediate and long-term) clustering its synergy during the current time and price structure."

For a more detailed technical picture, let's take a look at the gold and silver markets and see what trading/investing opportunities we can identify for this week.

GOLD

The June gold futures contract closed at $1293. The market closing below the 9 day MA ($1296) is confirmation that the trend momentum is bearish. A close above the 9 day MA would negate the weekly bearish short-term trend to neutral.

With the market closing at the VC Weekly Price Momentum Indicator of $1293, it confirms that the price momentum is neutral. A close above the VC Weekly, it would activate a long position. A close below the VC Weekly, it would activate a short position.

Cover short on corrections at the $1278 - $1262 levels and go long on a weekly reversal stop. If long, use the $1262 level as a Stop Close Only and Good Till Canceled order. Look to take some profits on longs, as we reach the $1309 - $1324 levels during the week.

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SILVER

The July silver futures contract closed at $19.35. The market closing below the 9 day MA ($19.44) is confirmation that the trend momentum is bearish. A close above the 9 day MA would negate the weekly bearish short-term trend to neutral.

With the market closing below The VC Weekly Price Momentum Indicator of $19.47, it confirms that the price momentum is bearish. A close above the VC Weekly, it would negate the bearish signal to neutral.

Cover short on corrections at the $18.93 - $18.52 levels and go long on a weekly reversal stop. If long, use the $18.52 level as a Stop Close Only and Good Till Canceled order. Look to take some profits on longs, as we reach the $19.88 - $20.42 levels during the week.

Click to enlarge

The information in the Market Commentaries was obtained from sources believed to be reliable, but we do not guarantee its accuracy. Neither the information nor any opinion expressed herein constitutes a solicitation of the purchase or sale of any futures or options contracts.

Trading derivatives financial instruments and precious metals involves significant risk of loss and is not suitable for everyone. Past performance is not necessarily indicative of future results.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in AGOL, AGQ, DBS, DGL, DGLD, DGP, DGZ, DSLV, DZZ, GLD, GLDI, GLL, IAU, PHYS, SGOL, SIVR, SLV, SLVO, TBAR, UBG, UGL, UGLD, USLV, USV, ZSL over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.