Negative divergence warning to longs in overcrowded Silver trade

FX:XAGUSD   Silver / U.S. Dollar
Negative divergence in momentum indicators including the RSI shouldn't be ignored by longs in the overcrowded Silver trade.

  • Silver currently trading around 20.20
  • Selling has been seen 50 cents higher around 20.70 over the past month
  • Support levels: 19.09 (38%), 17.83 (62%), 16.94 (78%)
  • Resistance level: 21.12 (high pivot )
  • Downside target: $18 (and possibly a test of the upward sloping 2016 trend line currently above $17)
  • Trade management: Sell within 20.17-76 with a stop (on daily close) above 21.12

For further insight and discussion please contact me via Tradingview or LinkedIn, on Twitter @James_LVDTA, and visit http://www.lexvandam.com to become a member of the Trading Club.
Trade closed manually: The case for a retracement may no longer be valid:

Do not get caught short precious metals as the case for owning gold appears to be regaining ground as USDJPY falls.
stefanhb46 JamesHelliwell
Hi James! Are you expecting further downside in XAG due to the negative divergence? Glued around the 50% fib at the moment? Im a big fan of the 50% & 61.8% fib levels for trading off, but your brilliant analysis on negative divergence with the RSI has me questioning myself haha. Its not something Iv'e looked at before. Thanks James!
JamesHelliwell stefanhb46
Hi Stefan

Lex and I discussed this in detail in our September Trading Club meeting produced recently for the month ahead, which became available to members yesterday. It might be worth taking a look if you are interested - http://www.lexvandam.com/en/trading-club
stefanhb46 JamesHelliwell
Thanks for the reply James! I will take a look! Can't argue with a free trial! :-)
Silver is now at a 7-week low, having fallen for 3 consecutive weeks, the worst losing streak since May 27th. You were warned.
Thank you, James! Seems to be a perfect analysis!!
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