As silver just broke above its 2016 highs, it must be a bullish confirmation of the upswing? In short, no. Let’s take a closer look…
As silver just broke above its 2016 highs, it must be a bullish confirmation of the precious metals upswing. In short, no. Let’s take a closer look at the below chart.
We marked the final upswing of 2016 with a blue rectangle and we copied it to the current situation – starting at the most recent low.
The moves are almost identical. Ok, silver moved slightly higher in today’s pre-market trading, but it’s already back within the rectangle. At the same time, silver invalidated the move below the 2014 high, and it seems that it’s about to invalidate the rally above the late-2014 high as well. The invalidation of the breakout above the 2016 (which we expect to see shortly), will be the final sign that the top is indeed in.
So far, today’s silver’s performance looks like a huge daily reversal candlestick. Of course, the day is far from being over (in fact, the markets have yet to open in the U.S.), but the sizes of the moves both up and down are already meaningful.
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