Silver Loses A Battle, But War Continues!

MH8Submitted by Morris Hubbartt:

Silver is testing long term support at $19.50, and that’s a concern. Weekly RSI is oversold, but it still can’t get over 30.
$16.25 is the next key support zone on the downside, and I’m committed to buy more silver there.  Silver bulls have lost a lot of battles recently, but not the war!

FBIG4

 

Dow Arc Of Failure Chart

 

MH1

 

  • The US market is resilient, and major market tops are built slowly.

 

  • Distribution volume and the lack of leadership are significant now. The average investor is probably too optimistic at this stage of the market.  Better opportunities lie ahead after a market correction.

 

FXI (China Stock Market Proxy) Chart

 

MH2

 

  • China is significant, because it is the world’s largest manufacturing economy.

 

  • FXI broke the neckline of a head & shoulders top pattern on Friday, which is ominous. Now, the market is almost free-falling.  Watch the volume on any rally.  I expect it to be feeble.

 

  • My downside FXI target is $26.

 

Gold Cycle Chart

 

MH3

 

  • I have stated here several times that the (trap) door is open for a move to $1260 or lower. If there is a move to that level, the “smart money” COT indicator should be quite bullish.

 

  • Small speculator (“dumb money”) comex long positions are near 20 year lows.

 

  • This cycle chart suggested there could be some kind of topping process in the $1700 – $2200 area, and it is now indicating that the $1000 – $1400 area is some sort of vague bottom.  Cycles need to be considered in a very “loose” manner, but this one suggests gold does offer value to investors now.

 

  • Note the RSI indicator; it is still under 30, and struggling.  That’s bearish technical action, but value players should be buyers now.

 

  • MACD showed some positive signs of reversing a week ago, but it’s already back into “bear mode”.

 

Gold Seasonal Chart

 

MH4

 

  • This is a chart from Dimitri Speck. It shows the seasonal tendencies of gold, over the last 30 years.

 

  • This could be a good year for seasonal chartists, but note the April period.  Instead of a “seasonal rally”, gold experienced the worst crash in decades.
  • The early summer is when gold typically rallies. The chart is bullish, but these seasonal patterns don’t come with a guarantee!

 

GDX Moment Of Truth Chart

MH5

 

 

  • A wave of panic selling has totally destroyed the small inverse head & shoulders pattern.

 

  • The low of the head is at $26.24, and any rally is likely to stop there.

 

  • It’s a disappointing time for bulls; another battle in the great gold war has been lost. 

 

  • My recommendation at times like this is to go into “safe mode”.  Try to buy some of your favorite gold stocks, but keep the size very small.

 

GDXJ Junior Stock Destruction Chart

 

MH6

 

  •  Many individual junior stocks are trading “no bid”.  An ETF like GDXJ can give investors a measure of confidence, because there is always good liquidity.

 

  •  I mentioned my concern that GDXJ could not stay above the blue trendline, and you can see that the price looks like it just dropped through a trap door.

 

  •  Investors need to wait for a new technical base formation to form, and then we’ll do battle with the bears again!

 

Silver Seasonal Chart

 

MH7

 

  •  Like gold, silver can bottom in June.  Silver is much more volatile than gold, and the seasonal charts can be less reliable.

 

  • Money management tactics are probably more important now than “calling the seasonal bottom”.

 

Silver Technical Danger Chart

 

MH8

 

  • Silver is testing long term support at $19.50, and that’s a concern. Weekly RSI is oversold, but it still can’t get over 30.

 

  • I bought a little silver a week ago, but momentum traders should stay out of this market.  MACD must not only turn higher, but show a crossover buy signal, or silver will continue to drift lower.

 

  • $16.25 is the next key support zone on the downside, and I’m committed to buy more silver there. Silver bulls have lost a lot of battles recently, but not the war!

 

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FBIG4

 

Comments

  1. You are worthless.

  2. What about this chart?
     
    http://www.gold-speculator.com/attachments/editors-picks/13216d1289948373-200-year-chart-dow-gold-ratio-dow-gold-20ratio_1.png
     
    Notice the approx 1976 time frame. I think that is what is happening right now. Eventually (2 months, 4 month or 8 months? IDK) the gold price advancement trend will resume.
    History may not repeat exactly, but it often rymes!

    Ratio could go all the way to 18-20 before it falls hard. That ‘could’ imply say 16800 on the DOW and $900 for gold = ~18.5:1. There are no gurantees that it would even make it that high though.

    • Posted by Precious Metal Pete:
      GOLDEN, Colo., June 21, 2013 /PRNewswire/ – Golden Minerals Company (NYSE MKT: AUMN); (AUM.TO) (“Golden Minerals” or “the Company”) announced that it has suspended operations at itsVelardena mine as of June 21, 2013, in order to conserve the asset until operating plans and prices for silver and gold indicate a sustainable cash margin for operations. The employees at the Velardena mine were informed of the Company’s decision in the afternoon of June 21, 2013.  In February 2013 the Companyanticipated the Velardena operations would achieve operating cash neutrality during the third quarter 2013, assuming gold and silver prices of $1,600 per ounce and $30 per ounce, respectively. In May 2013 the Company projected a $5 million negative margin from the operations for the remaining three quarters of 2013 at prices of $1,500 gold and $25 silver.  Metals prices have continued to decline and remain below these levels.

  3. Charts are pretty useless as long as the cartel can dump unlimited amounts of paper silver on the market. CFTC won’t investigate and I would bet they are leveraged 300:1 by now if not more.

    • Who cares about the paper players?   Do you think that buying paper silver should move the silver price higher?  I don’t.
      I wish people would stop complaining about the paper market, buying a silver futures contract is NOT a silver investor, so why should that put upward pressure on the physical silver price?
      The only silver investors are physical buyers, buying of physical silver remains weak, that is why silver is at $20 oz today.
      Physical buyers can destroy the paper market, clean out the inventory and then we have something, it hasn’t happened.

  4. What’s the green wavy line?  What is that attached to? 
     
    The green line looks good but means nothing, cycle? Based on what? Just wacking in a couple of sine waves on a graph, don’t make it real. 

  5. copy that Powerball  This is a high volume mine in a lower cost country, Mexico.  This mine, amongst others in SA and many others reported by SRSRocco show a large decline in mined volume.  I would guess few mines can produce gold or silver at present prices unless they are in China or some other slave state.

  6. Not sure why anyone following PM’s puts any stock in technical analysis these days. These charts are worthless so long as the cartel has iron-fisted control over the paper markets. 

  7. The nonsense continues…
     

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