Silver has seen an unexpected rally to most and continues to show strength as holdings of silver-backed ETFs reach all-time highs. Since posting "Potential Inflection in SLV: Price Action and Options," (under CommoditiesTrader) SLV is up almost 22 percent.
However, near-term there will be a correction to work off the overbought conditions.
The RSI was quite elevated at 77, while the z-score hit a near-term high of 2.9
The +/-DMI is showing that price action still remains positive but the ADX is beginning to tick lower.
The stochastic indicator is currently over bought at 87.51/93.26
Of course, precious metals will move with headlines. Given the sharp two-day decline, the SLV looks promising between $15.90 and $15.60. If traders sell through the secondary uptrend near $15.60, we could see further selling to $15.
It's important to remember the risk is dynamic. Traders will flock to the safe-haven aspect of silver if more troubling news surface about European banks, Brexit and, simply, slowing growth.
A correction will only be healthy going forward. The weekly chart shows at $17 is a tough nut to crack - only seeing one close above this level since January '15.
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This makes sense to me. I was long Silver from 16.02 but closed as price crashed down thro 4H MA (my trading timeframe) . Wondering if it's an A-B-C retrace from yesterdays top & will look to get long again when hopefully a momentum divergence manifests indicating a continuation of the uptrend restarting. As you say need to keep watching because some (bad) news could break and the price could fly (like Gold). The deeper the pullback the better the risk reward ratio imho. Thanks for posting, hope you keep posting on Silver. regards ps. also following on twitter and avid listener to Booms & Busts radio with Jonathan Davis, Chris was on show. Up the Arsenal !
MacroView_Research
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Thank for the comment! Pullbacks are welcomed. We saw big retracements in gold during this run only to hit higher highs. Also, seasonality is at work too. JAN-MAR are typically the best for silver while JUN-AUG tend to be the weakest. Thank you for the support and definitely plan on posting more on silver
forever20
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Didn't know seasonality in Silver, constantly learning. Glad to hear more coming on Silver, Cheers