Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Why Most Investors LOST Money by Investing in ARK FUNDS - 27th Jan 22
The “play-to-earn” trend taking the crypto world by storm - 27th Jan 22
Quantum AI Stocks Investing Priority - 26th Jan 22
Is Everyone Going To Be Right About This Stocks Bear Market?- 26th Jan 22
Stock Market Glass Half Empty or Half Full? - 26th Jan 22
Stock Market Quoted As Saying 'The Reports Of My Demise Are Greatly Exaggerated' - 26th Jan 22
The Synthetic Dividend Option To Generate Profits - 26th Jan 22
The Beginner's Guide to Credit Repair - 26th Jan 22
AI Tech Stocks State Going into the CRASH and Capitalising on the Metaverse - 25th Jan 22
Stock Market Relief Rally, Maybe? - 25th Jan 22
Why Gold’s Latest Rally Is Nothing to Get Excited About - 25th Jan 22
Gold Slides and Rebounds in 2022 - 25th Jan 22
Gold; a stellar picture - 25th Jan 22
CATHY WOOD ARK GARBAGE ARK Funds Heading for 90% STOCK CRASH! - 22nd Jan 22
Gold Is the Belle of the Ball. Will Its Dance Turn Bearish? - 22nd Jan 22
Best Neighborhoods to Buy Real Estate in San Diego - 22nd Jan 22
Stock Market January PANIC AI Tech Stocks Buying Opp - Trend Forecast 2022 - 21st Jan 21
How to Get Rich in the MetaVerse - 20th Jan 21
Should you Buy Payment Disruptor Stocks in 2022? - 20th Jan 21
2022 the Year of Smart devices, Electric Vehicles, and AI Startups - 20th Jan 21
Oil Markets More Animated by Geopolitics, Supply, and Demand - 20th Jan 21
WARNING - AI STOCK MARKET CRASH / BEAR SWITCH TRIGGERED! - 19th Jan 22
Fake It Till You Make It: Will Silver’s Motto Work on Gold? - 19th Jan 22
Crude Oil Smashing Stocks - 19th Jan 22
US Stagflation: The Global Risk of 2022 - 19th Jan 22
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Silver Seems To Shock The Market

Commodities / Gold & Silver 2019 Jul 19, 2019 - 09:09 AM GMT

By: Avi_Gilburt

Commodities

This article was first written for members on Tuesday July 16: The talk of the metals market on Tuesday was silver. It seems many were shocked and surprised by this rally in silver on Tuesday. And, I am sitting here scratching my head as to why all the shock.

Well, as I think about it, I am starting to understand the shock if you had been reading what everyone has been writing about silver. Whereas the rest of the complex has already moved strongly higher, silver has been significantly lagging. And, I have been hearing one excuse after another as to why it is lagging, such as silver “has been acting as an industrial metal.”.

But, last I looked, the economy was humming along. So, why would an industrial metal be lagging? Moreover, it certainly did not act like an industrial metal on Tuesday.


Well, now I have to ask you if anything happened on Tuesday which supports the strong move in silver? I cannot find anything that can explain silver’s run up on Tuesday – well, at least not anything in the common sense of why people believe markets move.

In fact, silver even rallied alongside a rally of the US dollar. That is not supposed to happen, right? Also, consider that while silver rallied strongly on Tuesday, gold and many mining stocks were down on the day.

But, here is the cherry on top: I thought the metals were not supposed to rally based upon the latest "bearish" COT reports? Yet another metals conundrum.

In fact, much of this current rally in the entire complex has been a true head-scratcher for most traders and investors.

Well, this was not a head-scratcher for any of our subscribers. You see, we outlined a strong upside set up in silver in the last weekend analysis I provided to the members of ElliottWaveTrader.net.

The main problem with most investors and traders is that they rely upon correlations to set their market expectations. But, for anyone who has any real experience or understanding of metals, you would know that you must analyze each chart on their own. And, in so doing, you would understand that not all metals charts run together. Moreover, you would even understand that the metals can and do run strongly alongside the dollar, as well as fall strongly alongside the dollar.

And, for those of you that thought there was something wrong with gold rallying while silver was lagging, do you not remember the year 2011? That was when silver topped in April of 2011, whereas it took gold another 5 months before it completed its topping structure.

Lastly, as I noted to my subscribers months ago regarding the technicals and COT:

As gold approached its highs of the past 3 years during this week, I am now hearing about how the RSI is hitting overbought levels, how the COT is suggestively bearish due to the commercial’s short positions, etc. But, very few understand these points within the appropriate context.

You see, if the market is indeed still within a bearish posture, then overbought indicators are indicative of the market preparing to turn down again. And, if the market had rallied in a 3-wave fashion, then I would clearly be viewing this overbought indication as significant.
However, when the market turns towards its bullish inclinations, as it has potentially done with a 5-wave rally off the May lows, simply reaching a level in an indicator which has been viewed as an “overbought” reading is not bearish. Rather, these indicators will embed during a strong bullish move (most specifically a 3rd wave). This often fools everyone who is reading the indicator in the same way during a bullish trend as they do within a bearish trend. The same applies to the COT. We have seen many instances where the market has entered very long periods of extreme bullish action against the positioning of the commercial traders. So, again, I would not view this as dispositive of the nature of the market.

So, please leave all your correlations, news events, and fundamental explanations at the door when you view silver. It is driven by sentiment just like all the other metals.

And, as long as we hold over the 15.45/15.50 YI level, we can continue towards the 16.50 region next. However, should we break below 15.45, then it would suggest we can see a bit more downside consolidation over the coming weeks before silver is again ready for another bigger move higher.

Avi Gilburt is a widely followed Elliott Wave analyst and founder of ElliottWaveTrader.net, a live trading room featuring his analysis on the S&P 500, precious metals, oil & USD, plus a team of analysts covering a range of other markets. He recently founded FATRADER.com, a live forum featuring some of the top fundamental analysts online today to showcase research and elevate discussion for traders & investors interested in fundamental rather than technical analysis.

© 2019 Copyright Avi Gilburt - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in