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The Gold and Silver Analyst authors articles on gold and silver at his website (http://www.goldandsilveranalyst.blogspot.com/), focusing precious metals from both a fundamental and technical point of view. Visit his site: The Gold and Silver Analyst (http://www.goldandsilveranalyst.blogspot.com/).
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The Gold and Silver Analyst
  • Silver Still Critical
    The overbought indicators ares till screaming and I am sidelined from my speculative positions for now though those who short silver may find opportunities here.

    I have introduced a $20 subscription service at my blog (silveranalyst.blogspot.com/) which I call Silver Analyst Lite and this gives access to the message board updates I give to full subscribers but you don't get the monthly newsletters. Check it out and subscribe if you like it. I will also for a while give the latest issue of my newsletter free to new subscribers.

    Sep 21 5:26 AM | Link | 1 Comment
  • Silver Going Critical

    Silver has put in a real price push in the last few months having run from a low of $12.45 on the 13th July to a current best high of $17.66. Now the talk is of $25 or higher silver and $1500 gold. Buyers are coming out in force afraid to miss out on a big move and are piling into bullion, stocks and ETFs. Meanwhile the smart money is ready to take their profits and move on. Not because silver must be suppressed at all costs but rather because profits are the lifeblood of any business be it the sole trader riding the short term moves or the investment bank whose share price depends on consistently profitable buying and selling.

     

    The chart below helps sum up the situation. It is the price of silver divided by its 200 day moving average (or RMA for short).




    The chart goes back the entire length of this 6 year bull and the price of silver is superimposed in red. Note the horizontal line I have drawn at 1.300. I have also drawn vertical lines where the RMA crosses the 1.300 threshold. What is our conclusion? When the line is crossed, you do not open your wallet and empty it into gold and silver. Rather you lighten your postions and wait for the next great buying opportunity.

    Note the previous crossovers. On the 10th March 2004 the line was crossed and silver peaked 3 weeks later. On the 28th March 2006 it crossed again and silver peaked one month and two weeks later. After this things got tighter as the threshold was crossed on 8th February 2008 and silver peaked 4 weeks later. Finally, it crossed the last time on the 1st June 2009 and silver topped a day or two later.


    This Wednesday it crossed 1.30 again but only just at 1.31. The alarm bell has begun to ring but 1.31 is not a decisive enough break for me and needs monitoring. Will silver continue to rise for over a month like it did in 2006 or will it fizzle out like June 2009 after only days?


    I don’t know but rest assured this is not a time to buy in bulk unless you are disciplined with your stops and do not allow them to be unactionable at any time. Am I saying the silver bull is now dead and buried? Not at all! Was the bull over after the previous examples? Prepare for greater heights but don’t get carried away at these critical junctures.


    Further analysis of silver can be had by going to our silver blog at http://silveranalyst.blogspot.com where readers can obtain a free issue of The Silver Analyst and learn about subscription details. Comments and questions are also invited via email to silveranalysis@yahoo.co.uk


     

    Sep 17 10:36 AM | Link | Comment!
  • Silver Update

    A week or so ago we gave the short term view of silver that a decent sized top was in. Our first choice Elliott wave pattern (see below) looked complete as you can see from the chart we reproduce below. We had an alternate wave count which would be invalidated if it went below $14.80. That has now happened so the first choice count is vindicated.

     

     

     

    The new situation is shown below and the question naturally is what are we correcting here? The impulse wave which ran from mid April to early June is either wave 1 of a bigger impulse wave or it is a sub wave of a corrective wave which we call “A” here. Obviously being only wave 1 of 5 in a larger impulse would send silver well above the $21 highs of last year but we do not think that is the case for now. The depth of the current correction will answer that question in due course. I have an idea where this drop may end up but I am sure it is the prelude to higher highs (larger correction or not – just not as great as a mega impulse wave).

     

    From a purely Fibonacci point of view (not the only tool we rely on thankfully), the 50% retracement is at $13.91 – we have seen as low as $14.05 so far. The 38% retrace was taken out at $14.40.

     

    After this correction ends it is one final push up and then into a final multi-month correction phase.

     

     

      

     

    Further analysis of silver can be had by going to our silver blog at http://silveranalyst.blogspot.com where readers can obtain a free issue of The Silver Analyst and learn about subscription details. Comments and questions are also invited via email to silveranalysis@yahoo.co.uk.

    Jun 16 3:57 AM | Link | Comment!
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