After spending all but three days below the daily 20ema, silver has formed a HL (higher low) and from a daily pin bar setup last Thursday. Since then, it has held the gains, and for the first time in over three weeks, closed North of the daily 20ema. The SL/LL/HL formation suggests the $6 drop from $37 has found some solid buyers with a change of hands in play.
If I had to guess, the drop from $37 was definitely part of the price manipulation that is so common to gold and silver, trying to reduce speculation from retailers while shaking out any uncommitted players who are concerned about volatility. But this bottoming formation suggests accumulation buying if it can sustain these levels.
I suspect a possible medium term bull run coming, but am a little cautious until it clears $33.30. If price action can hold above this level and the daily 20ema, then I will suspect a short term bottom is in place for precious metals with silver being the canary in the coal mine, being the first to close above the daily 20ema amongst the two. I also like buys on dips to the $31.75 and $31.25 region for an eventual run back up to $37 medium term.
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Silver: Canary In The Coal Mine?
Published 04/03/2012, 02:55 AM
Updated 05/14/2017, 06:45 AM
Silver: Canary In The Coal Mine?
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