Written by: Octafinance.com
Even though we are long-term bullish on gold and silver we are negative medium-term. The Silver chart shows a technical setup with a possible target of a $12 per ounce.
Long-Term Silver Price Chart Still Positive
There is so much to see on the silver chart that we feel obligated to share our interpretations for the future price movement. We will start with the big picture. The whole move of 180%+ from $18 to $50 between 2010 and 2011 had only a minor correction. When the price crossed the upper channel of the long-term chart going back to 2002, it alerted us that silver is out of sync with normal markets.
Source: Rightedgesystems + Octafinance Interpretations
Of course as with any parabolic movement, the trend was not sustainable. Silver couldn’t break $50 per ounce barrier and sellers' came. The CME also increased the margins which forced all longs to cover (sell), as the sentiment was more than positive “98% of all traders were bullish silver” according to the Daily Sentiment Index (DSI). What happened after that is obvious from the chart, silver experienced a few technical setups that all broke down, reverting the parabolic movement to the upside down. Now based on the long-term support line formed during the last 13 years, we have a support around $11-$12 per ounce.
Is Silver Going to The Long-Term Support At $12?
Currently the silver price has formed a 6 months continuation Head & Shoulders formation. In order for this H&S to be valid, the price should not go above the right shoulder or around $17.5. If the price of silver starts going down to the $15 level, then we might be prepared for a breakout to the downside. Then $12 is a real possibility.
Source: Rightedgesystems + Octafinance Interpretations
Are Hedge Funds As Wrong with Silver as They Were with Oil?
Currently the COT report which is displayed on the chart below shows that producers are still short silver. This is an important indication because we know that producers are the best informed players on the market.
Source: Barchart + CFTC
Hedge funds and small speculators are still long prepared for a silver rise. This all reminds us of the situation with oil just a year ago when producers hedged and shorted oil as much as they could like hedge funds, CTAs and speculators were long. The price then crashed from $110 to $45 per barrel. There is no guarantee that this will play the same, as silver has already gone down 68% from its 2011 high but why shouldn’t we see a 76% decline to $12?
Oh I love commentaries. Does not matter where they are, majority of comments have nothing to do with article or topic; or are so off the wall they are meaningless.
I don't think that the pattern is a Head & Shoulder.
It is more like a sideways movement in the longer term downward movement.
Yes the chart looks weak but not a H&S.
I have quite an accumulation of Silver.Acquired over many years.To me,it is hard cash. Our paper money is going the way of the old Mexico Peso.We will need a full bag of dollars to food shop.Proof is, Hard currency is always welcome World wide.With age comes wisdom.
Given that the FR will raise rates eventually, $12 is possible. Has nothing to do with charts, everything to do with dollar strength. Same applies for oil and gold.
As soon as JP Morgan runs through the billions they got from the government they will either have to go back to the government for more money, or allow the dollar and the price gold and silver to find their true level. Watch between 2;45pm and 4pm how the dollar goes up and gold and silver goes down. The manipulation will end when people realize that the government's "tallystick" is worthless and the king wears no clothes.
First chart is a linear chart. Try looking at a log chart. Much different perspective.
http://www.booktrakker.com/Economy/SilverLogChart.jpg
Silver did a perfect backtest at the red triangle. We are in a bear market, not a bull.
Ditto for gold.
Andy
When one considers the unprecedented short positions jockeyed about by the Really Big Banks [RBB, lol], always closed out at the last minute, crushing small-time players & speculators, what else can one expect?
No doubt both G&S are in 'orderly markets' [nudge, nudge, wink, wink] and we only need stand aside until the RBB are finally exposed even more than they have been [ever wonder about the record number of relatively young international bankers 'dying early' or in 'accidents' or are 'suicides'? These people can afford the best care and health on the planet, yet they're falling all about us like --well-- like young international bankers!
Let me know when Matt Taibbi is found hanging from Blackfriars Bridge, drowned first, of course, à la Roberto Calvi, the Pope's unfortunate banker. [see http://en.wikipedia.org/wiki/ or Roberto_Calvihttp://www.onlinepublishingcompany.info]/content/sitenewsreadmore/infobox/news/template/default/active_id/746 amongst other sources]
thats fine. i will buy more at 12. i am confident that silver will be much higher 10-15 years from now. i don't care where it goes over the next year. the key is this... is something overpriced, or underpriced? you want to buy something that is grossly underpriced, and hold for many years. do this & you will do ok financially.
ditto!!!
silvers been a unpredictable investment for 20 plus years its used mostly in the software industry they want to keep the price low the brokerage firms work with them and formed a alliance made a paper article call ETf's and, strangle the long side when silver moves higher. the open interest in the silver market is small compared to the gold market. when the public has a hold on the price then industry raises the margin and forces the specks out of the market. I seen this in the 80s sitting in a brokerage firm with the hunt brothers holding a large long position. the industry don't need to stock pile silver they buy as they need it, So the lower the price the better. the last 30 years people are looking for silver to adjust and follow gold Its been a long time coming but no cigar. I gave up on investing in wall street the markets are rigged to take your money. its a corrupted conspiracy all the up the later. The people you elect in Washington are making millions. its your fault 16 years of bushes and 8 years of Clintons. and bushes are trying again. its click.
Cut the crap Carl.
Everyone has noticed that the Clintons
are trying again too.
Agree metals will be much higher eventually in few years but been long DSLV from 38 and if silver does go to 12 then DSLV will go thru 100...then time for USLV.. also trading DUST as GDX could fall to 13's...