SILVER, A TECHNICAL ANALYSIS (6/5/2019)
I'd like to share my thoughts on the current position of the Silver price, upcoming areas of resistance to keep an eye on, and why I think the long-term indicators are looking very, very good for those who are holding bullion right now.
(For perspective, all charts in this post are of the WEEKLY variety.)
The first thing to look at is the position of the price relative to the moving averages. Seeing as how right now the 50 moving average is well below the 200 MA, the overall indicator is a continuing falling price. That said, hang with me and we'll see why I think that's about to change.
The 3 red circles are price areas of interest. First, the price is moving sharply upwards towards the 50 MA - so it's important to watch what happens when the price reaches that level, and if we bounce back down or blast through it. The next area to watch is the longer-term trend-line (orange line) - which I will further comment on in just a little bit. Lastly, the next major resistance level is around the $16.50 area, which may correlate very well with the price approaching the 200 MA. There may well be some testing & retesting in that area. After that, good luck buying any more silver bullion - at least not without paying a much more hefty premium.
Zooming out to a much longer view, it is EXTREMELY significant to see that the price has been moving through a long descending wedge formation and has bounced down off the descending trend line approximately 9 times. That is a whole, whole lot of building pressure towards the upside - and I think it's indicating that we'll see a very violent upward move, once the price breaks above that trend.
Bringing those two views together clearly shows the next major point of resistance around the level of $16.50.
By itself, I believe Technical Analysis is pretty useless. Anyone who follows the markets knows they are manipulated B.S. when a Presidential Tweet can swing the Stocks by 200 - 500 points in a single session. That kind of volatility clearly indicates that something is very, very wrong with the entire US dollar currency. And, the FED just talks about a possible rate-cut, or Trump talks about tarrifs on China or Mexico - and the markets go nuts. Bottom line, I think this kind of volatility in the news cycle is beginning to convince more and more people that all is not well.
Gold is catching a little bid, ever since the Bank of International Settlements re-monetized gold bullion 100% on April, 1st, 2019. The metals are basically at their lowest possible price, compared to their mining-costs. I think Gold will lead the way on the next move upwards, and it's impossible to predict the exact timing - but we are certainly approaching the "season" of time where we could finally start to see some payoffs for being positioned in the bullion ahead of time. Whether you like gold, silver, or both - the next recession will be very, very good for precious metals and bad for stocks, bonds, and eventually the US dollar itself.
Once the FED runs through its' ability to lower interest-rates by 2.5%, they will start printing dollars into oblivion. We could very well be at that point in 2020 - 2021. 3 more years, at the very longest, and we'll really start seeing people flee into safe assets. When that happens, sell some of your bullion into the price mania and take some profits. If you're as patient as I have been with the stacking, God knows we deserve some love!
The final point I'd like to make about Silver Bullion is the fact that it is actually a very tiny market, compared to how much money is floating around out there. Maybe... 2 Billion ounces are actually in existence & in play, at any given time. More than 2/3rds of that is already held by big banks and industries - and they are NOT selling. If that leaves the other 650 million oz. out there for jewelry, miscellaneous uses, and small investors, just think about how much of that bullion is already wrapped-up by hard-core stackers. So, really, just a few Billion dollars moving out of stocks and/or bonds will absolutely blow the price upwards like nobody can imagine. Simply put, if one large company like Apple, Samsung, Sony, or any other high-tech manufacturer decides to release some of its' cash holdings to buy up silver - THEY COULD BUY OUT THE ENTIRE MARKET AND STILL HAVE A LOT OF CASH LEFT OVER!!! So, really, just a small wave can seriously rock the silver boat - or capsize it.
Silver-Stackers, I encourage you all to HOLD FAST. Our payday is coming...
DISCLAIMER: I am not a financial advisor. Anything in the above content is meant for educational/entertainment purposes only. Do not make trades based on this article. I am not responsible for any financial gains or losses you make in regards to this information.