Monday Evening 27 June 2011
Yesterday, we posted an article on the S & P and one on silver,
positing that both may be buying opportunities. [See S & P -
Continuation Down, Or Buying Opportunity?, click on
http://bit.ly/lFigNL and Silver - Buying Opportunity?, click on
http://bit.ly/mdfmoc]. On Monday, the S & P was able to mount
a rally at an area of support. Meanwhile, silver was down over
one dollar. The difference in these two commodities is an
important one of which to be aware.
What you see on the daily is possible ending action in the form
of a higher swing low attended by increased volume, some of which
we identified as buying, Thursday's activity, third bar from the end.
Notice how today's low held the high volume low from then, and
price was able to rally. The question remains to what extent, but
that is not the point of comparison here.
In silver, we see no ending action. While we identified it at a support
area, there has been no evidence of an ability to rally, and price instead continued its decline. Another important point to make was the need
for confirmation. Support may not hold, and there would be no reason
to buy, based on current market activity.
We see possibilities for silver finding a low, but the question posed in
Sunday evening's article was, is it a buying opportunity. For buying
and holding physical silver, we said yes, but wait on the futures. Until
there is some form of ending action, as seen in the S&P, that advice
to wait still holds.
To find demand, silver is likely to go lower. What will demand look like? Increased volume on a rally that shows a wide range bar with
a strong close.
There is no recommendation in this post, just advice to learn to
observe the distinction of demand and a lack of it. The S&P has
more to prove, but not as much as silver.
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