Updated Silver Analysis + Where price is likely to go next!
Hey Traders, we had a decent drop in Silver yesterday and I know a lot of people are wondering what is going to happen with the price of the metals moving forward. Those of you who have been following my recent trades on Gold/Silver know that I was bearish due to the weekly chart showing a down trend. I linked those ideas in the related ideas section below so please be sure to check those out if you haven't already, as they will give you a better understanding of how I have been trading the metals over the past few months. My Short to Medium term outlook on the metals, has been bearish due to lower highs and lower lows on the weekly chart however that looks like it may be starting to change now (it has not changed yet but looks to be approaching a real buyers market judging the recent strength). We need to see how the metals perform over the next few weeks to get a better idea of what may be to come however this is an extremely bullish environment for the metals right now and I do agree with a lot of the Long Term fundamentals that support rising Gold & Silver prices.
Today we had a bearish engulfing candle show itself on the Daily Chart with a long sellers wick. Price has been going sideways for the most part over the past week and has been sitting right on the 200 period SMA (Pink line). Today that 200 period moving average was violated however I do not see a big pull back coming (I could be wrong, this is just my own personal analysis) and this is why.
Typically an engulfing candle is STRONG and more accurate when it closes near the low/high, in this example we would be looking for price to close near the low of the day (17.83) but in this case, that did not happen. This does not mean the engulfing candle is invalid and it is still a strong reversal signal when coupled with other conditions but we should always keep in mind where the buyers and sellers are. Please look at the Chart below for an example of where the buyers/sellers may have been during this false breakout and how there orders typically create engulfing candles. This is a very powerful condition to create a strategy around.
Based on the recent price action of the dollar and possible double top formation on Silver, I am anticipating that price will fall a little more before continuing to rise. I have marked the area that price is likely to fall into on the main chart of this idea (Top Chart). The price area that I am referring to is marked by a yellow rectangle. We may also see price retest resistance before reaching this area or I could be wrong however if price does fall into this zone, we can look for potential trading opportunities there. If price does not fall into this area, We still have potential trading opportunities (shown on Main Chart at top). We are essentially putting price action in a box and saying "if this happens, I will react this way, and if this happens I will do this". This is a good practice and will keep you somewhat unbiased and objective.
The Bollinger Bands on the daily chart are Contracting (pointing towards each other) and this is usually a good indication that a decent move is coming soon (Shown on chart below this paragraph). Also we may have a massive head and shoulders bottoming pattern happening on the daily and weekly chart. Targets for the head and shoulders pattern would be just above the recent highs in 2016. Interesting set ups on Gold/Silver right now and only time will tell.
Please leave a comment below to share your analysis and good luck trading!
Be careful with the markets right now as the DOW looks to have made a lower high on the daily chart (Analysis coming on the DOW, and S&P 500 soon)
Today we had a bearish engulfing candle show itself on the Daily Chart with a long sellers wick. Price has been going sideways for the most part over the past week and has been sitting right on the 200 period SMA (Pink line). Today that 200 period moving average was violated however I do not see a big pull back coming (I could be wrong, this is just my own personal analysis) and this is why.
Typically an engulfing candle is STRONG and more accurate when it closes near the low/high, in this example we would be looking for price to close near the low of the day (17.83) but in this case, that did not happen. This does not mean the engulfing candle is invalid and it is still a strong reversal signal when coupled with other conditions but we should always keep in mind where the buyers and sellers are. Please look at the Chart below for an example of where the buyers/sellers may have been during this false breakout and how there orders typically create engulfing candles. This is a very powerful condition to create a strategy around.
Based on the recent price action of the dollar and possible double top formation on Silver, I am anticipating that price will fall a little more before continuing to rise. I have marked the area that price is likely to fall into on the main chart of this idea (Top Chart). The price area that I am referring to is marked by a yellow rectangle. We may also see price retest resistance before reaching this area or I could be wrong however if price does fall into this zone, we can look for potential trading opportunities there. If price does not fall into this area, We still have potential trading opportunities (shown on Main Chart at top). We are essentially putting price action in a box and saying "if this happens, I will react this way, and if this happens I will do this". This is a good practice and will keep you somewhat unbiased and objective.
The Bollinger Bands on the daily chart are Contracting (pointing towards each other) and this is usually a good indication that a decent move is coming soon (Shown on chart below this paragraph). Also we may have a massive head and shoulders bottoming pattern happening on the daily and weekly chart. Targets for the head and shoulders pattern would be just above the recent highs in 2016. Interesting set ups on Gold/Silver right now and only time will tell.
Be careful with the markets right now as the DOW looks to have made a lower high on the daily chart (Analysis coming on the DOW, and S&P 500 soon)
Trade active:
Hey Traders, Price has fallen into the yellow zone shown on the charts above. As some of you know, I have been anticipating this down move and expressed that I would begin buying longer term positions if price could fall back into this zone. I have taken up a very small long position and look to add to that position in the coming weeks if Silver can show strength and recoup some of its recent losses. This is not a short term trade and there may be a little bit more downside to come however I do think this is a good longer term buy. Feel free to comment with your analysis or any questions you may have regarding this idea. thanks traders and good luck trading this week!
