Saturday 28 September 2013
Little in the way of news has transpired in the past week that could
have an impact on the silver market. The main stage has been set for
some time, regarding all the known factors affecting silver, to date.
There is no need to review any of them, at this point.
What can be noted is that the CFTC has reached the conclusion
that the "alleged" manipulation by JPMorgan in the silver market, well documented and presented to the CFTC by Andrew Macguire, was
much ado about nothing.. Just like lackey Eric Holder, chief law [un]
enforcement official a the Dept of [no]Justice, has not been able to
uncover any wrongdoing by Wall Street over the past 5 years, the
CFTC ran into the same "bad luck" during its two-year investigation.
What this tells everyone with an interest in owning gold and silver is
that the wheels are coming off the central bankers greed cart, and
when that happens, silver will be at or above where most imagine it
can go. Continue to buy and hold. It is just a matter of time. How
much time will be irrelevant, once it everything falls apart, and fall
apart it will.
Our latest view of the market was provided in "Central Bank Death
Dance, Part I," [here, if you did not read it]. It presents a less
conventional outlook on what not enough people are taking into
consideration in trying to understand why silver has not rallied
strongly, based on otherwise very strong demand factors.
This article is more abbreviated for content, as a consequence, so we go directly to the charts, and even they have little to add as price
moves in a sideways fashion.
The final close for the monthly chart is Monday, but unless price makes
a dramatic move up or down, September has been an "inside range"
bar. It has done little to erase the stronger August rally bar, and for
that reason, a slight edge goes to the bulls. What is critical now is for demand to take over and rally price higher.
Sentiment aside, our expectation is for a more protracted sideways
range in the months ahead. We could be wrong, but it is an "odds-on" assessment. As always, we let market activity make the final
determination, as it always does.
Not much can be learned from the weekly and daily charts, so we
skip to a few intra days to see if there are developing clues. The 90 minute chart shows a strong D/S, [Demand over Supply] day on high
volume, 18 September. It did not go much higher, and it set up theupper bound for a TR to follow, unknown at the time.
A few days later, a counter-punch by S/D, [Supply over Demand], on
even higher volume. This downside effort also failed to result in any
further downside, and it held the lows of the D/S bar, a plus for the
Not much else can be said as price has since moved sideways for five
more TDs, letting us know the buyers and sellers are in balance. What we also know is this form of balance inevitably leads to unbalance, and a directional move can be expected to follow as price moves further
along the RHS of the TR, [Right Hand Side of Trading Range.]
Zooming down to a 60 minute chart does not offer a higher degree of
clarity, but there are a few developments that appear more positive
than otherwise. Keep in mind, this is an intra day chart, and the
lasting effect is weaker than a higher time frame, weekly or daily.
The chart comments give what we see. As price moves further along
the RHS of a TR, the market is closer to reaching an imbalance, and
that is where some low-risk entries can be made, if the set-up is clear enough on the lower time frame charts.
The decline for the latter part of Friday was labored after the EUM rally early in the day. [Ease of Upward Movement]. We pay attention to
the how of developing market activity, and the EUM is stronger than
the labored "correction" that followed. If we had to take a stand, we
would expect more upside on Monday, but that is just a non-
committed "guess" because price can open lower. The market is not
concerned about our "guesses," anyway.
We remain lightly committed to the long side, but the sideways activity has not done much for the position. Plan accordingly and follow the