SD Friday Wrap: Call it a victory for silver this week, and also call it momentum for going into the next (because silver’s gonna need it)…
Half Dollar’s been bullish lately.
Titles of mine this week included:
- Monday – “These Five Points Say Don’t Be Surprised If We Get A Nice Gold & Silver Rally This Week”
- Wednesday – “Gold & Silver Are Grinding Higher And Confirming The Price Rally Has Begun”
On Monday in the SD Outlook I said (bold for emphasis):
OK. “So, are you saying gold & silver are going to rally this week Half Dollar?”
It wouldn’t surprise me one bit:
- Nobody is expecting the rally to begin in earnest
- Everybody has accepted the “summer doldrums” narrative (meaning don’t expect much of anything)
- But there is plenty of political and geo-political risk this week, including trade war risk, and that doesn’t even include any war drums or military actions
- The dollar could be rolling over now
- Yields could be dropping.
That’s just points there which support a rally, several fundamental and two technical in nature.
On Wednesday in the SD MIdweek I said (again, bold added for emphasis):
I’ve been expecting higher prices this week, as I called on Monday, and I still expect them, and that 3-minute chart above is showing the price action does look to be up.
I also wouldn’t be surprised to get a decent little rally here too in gold & silver.
So we can see I called for higher prices, and said we could see a decent little rally too. I backed-up and argued my case with only the most solid of facts, both on the fundamental front and from the technical.
Now on Wednesday, there were 46 comments to my SD Midweek.
Eleven of those comments were mine. I am attempting to build a community here, so I went into the post looking for spirited interaction and good discussion, but what I ended up doing was basically having to defend myself and counter some viscious attacks.
So let’s take out my comments so I can prove a point. That leaves us with 35 comments.
Of those 35 comments,14 were attacks directed personally at me or Silver Doctors, and many other we’re directed personally at others (Marshall Swing for example), and of the comments that remain, most of them were of negative sentiment in the precious metals in general.
There were a few comments where posters defended me also.
Okay, “what’s your point Half Dollar”?
Just a rant.
I was right.
Higher prices is what we have this week.
Not only that, but I’ve been spot on with nearly all of my calls since mid-May.
I can say it another way – I was not wrong, and not only that, I haven’t really been wrong since mid-May.
Okay, “so what Half Dollar, that’s only a few weeks”.
Yeah, a few weeks of staying on top of the markets daily, studying the tick-by-tick.
My calls have been solid because my arguments are solid.
I just needed to get that off my chest.
So here I sit and there I’ve ranted.
But I digress.
The better point to be made is that there is such bearish sentiment regarding gold & silver right now, that this is a good thing.
Because when everybody is bearish and negative, well, as I’ve said many times before, we all know what happens when everybody’s on the same side of the boat.
But let’s get off of my rant and get into the charts, shall we?
There is something I have been seeing in silver lately and I don’t like it one bit:
Silver really wants to rally here. However, the Cartel is heck-bent on not letting the white metal rally.
Notice how sometime after 11:00 a.m. EST, after silver has been rising throughout the morning, pressure is applied until about 2:00 p.m. EST when the Cartel knows silver is just going to grind in the sideways channel of pure agony.
In fact, on Thursday, silver had the audacity to break out of the sideways channel of pure agony not once, but twice, only to get monkey hammered back down into the allowable range.
Ha-ha, “Don’t you know that’s called ‘running the stops’ Half Dollar”.
Yes I do know that.
They run the stops to the upside to force some selling and then the Cartel adds on to that selling to create the downward pressure we’ve been seeing in the afternoon over the last three days.
And if you really want to put on some tin foil, think of what happens next week in the afternoon!
No coincidence there to have a recency biased kick in and think of silver as something that falls in price from 11:00 a.m. and throughout most of the afternoon trading.
Getting back to this recent pattern: On Thursday those stops we’re between $16.90 and $16.94, and the Cartel is absolutely not ready for silver to break out above $17 yet for whatever reason.
The probability of a Fed rate hike next Wednesday is over 93%, so this looks like it’s turning out to be a “sell the rumor, buy the news” event.
That means that silver could get sold into the rate hike, and after the rate hike, even the very same day as we have seen time and time again on FOMC rate hike days, silver could take off.
The Cartel has a problem, however, and that is silver does not have much downside too it. They have failed miserably on several attempts to smash price below $16, so they are settling for the next best thing – the sideways channel of pure agony. Where silver looked to be breaking out on Thursday, some suppressive fire was laid down over the battlefield too keep silver from sticking it’s head up too far out of the bunker.
And believe me, the Cartel would love for the range to be $16.40 to $16.60, just for extra agony, but they are not quite that skilled.
You see, while what Half Dollar’s analysis is a mix of art and science, well, so too the Cartel must blend in the art of price suppression with the science of it, and because they need art as much they do science, we get the broader range of $16.20 to $16.80.
But looking at silver’s daily chart, we see that it looks bullish going into next week:
With this week’s action, we now clearly have two higher-lows and two higher-highs painted on the chart. That is bullish and it is signaling a bullish trend.
When I make my calls, I’m often one of the first experts out there to notice the trend change, which in part explains the open hostility to my fundamental and technical analysis, but as the days go by, the chart is only confirming what I have been saying all along.
Also notice the neutral yet strengthening Relative Strength Index, and the Moving Averages Convergence – Divergence is indicating that we have momentum going into next week.
Also noticed the far left side of the daily chart.
See that low?
We’re almost 11% up since last summer’s lows.
Who is not happy with an 11% gain in one year?
Perspective stackers, perspective.
On the silver weekly chart, we can see my call for higher prices was spot on:
Silver also had nice volume this week too, which is bullish, and it even makes me think the “sell the rumor” of the Fed rate hike may have already passed, so we could really start seeing the rally in earnest before Wednesday if that is the case.
But let’s see how the ‘markets’ open on Sunday night and into Monday morning first.
Silver’s performance this week has been much stronger than gold’s performance and it shows:
We’re below 78 and dropping, and, once everybody else sees the rally that I see, we could see the ratio drop into the sixties rather quickly.
And then the ratio will be dropping for all the right reasons.
So gold’s charts, rightly so, don’t look as good as silver’s charts.
But gold’s charts don’t look bad.
On a daily basis the yellow metal is setting up to test a break-out of major moving averages:
With a break-out, we can get the 50-day moving average pointing north again. And with a rally coming off of the June rate hike, that would likely do it.
On the weekly chart, however, we can see gold is above a major moving average this week:
That’s the 50-week moving average that gold managed to get above this week.
Now, is it possible the rally doesn’t really grow legs until sometime in July?
It is quite possible.
But I do feel, for the reasons I’ve been arguing for over a month now, that the summer rally will begin sooner this year.
If this is indeed a “sell the (Fed rate hike) rumor, buy the news” event, “sooner” could be as early as next week when the metals grow legs.
So yes, the summer/end of summer rally could begin sooner this year.
I’m certainly not counting June out.
And the rate hike, for all intents and purposes, is already priced-in the markets.
Again, some perspective: Gold is up nearly 8.25% since the bottom at $1204 last summer.
That beats pretty much every retirement account and pension fund around.
Not too shabby if you ask me.
Is it what we want and are expecting to see with price action?
No it is not. Gold should be much, much higher in price.
But it is what we’re dealing with so we might as well make the best of it.
Besides, if there is more of a delay between now and when the rally grows legs, that delay affords new stackers the opportunity to get in at lower prices.
The last weekly chart (where each candle represents an entire week of trading) I’ve produced today is platinum:
Platinum’s daily chart is downright ugly, so I thought we could zoom out a bit and gain some perspective.
Platinum is up, albeit slightly, for three weeks in a row. It is looking like platinum has been bottoming and is now recovering.
This is encouraging price action, even if they are baby steps.
Palladium is now back above both major moving averages:
Palladium is representative of the “grind” higher I’ve been writing about.
It’s hard work.
And nothing is ever achieved without it.
Crude oil looks to be bottoming here with each passing day:
On Wednesday in the same article linked above, I said:
And crude has a little hook forming on the far right of that chart doesn’t it?
Well, today, I can say “yes”.
Yes it does indeed.
Now, with the very first chart in this article, I noticed something happening with silver in the afternoons.
I bring this up, because something very interesting is also happening on the copper chart:
We hear many reasons for copper’s erratic price action.
We’ve heard it’s rampant Chinese speculators, we’ve heard it’s increasing industrial demand based on infrastructure spends, electric cars, etc.
Also, which should not be discounted by any means, is the fact that copper is used to get silver to market.
Most of the silver that is produced and brought to market is a bi-product of base metal mining such as copper.
When copper rises in price, that motivates miners to mine more copper, which, by extension, brings more physical silver to market.
Think of it like crude oil.
The higher the crude oil price, the more incentive there is for oil producers to drill, right?
It’s the same for every commodity, and copper is no different.
I bring all of this up as a long-winded way of saying, Is there a problem with physical silver supply, so much so that copper has surged to nearly multi-year highs in just a matter of days?
Dollar bulls must be worried right about now:
The dollar is breaking down on the chart, and with momentum.
MOMO goes both ways you know.
Sure, the dollar is about to put a “golden cross” on the chart, but it will turn into a “death cross” in short order if the dollar keeps falling, and furthermore, if the dollar falls even faster, then it might not even cross at all.
Here’s a question about the dollar to think about –
With all this talk about Bilderberg meetings, G7 meetings, and Xi & Putin meetings, are we about to see a swift move one way or another with the dollar?
If it’s the G7 and Bilderberg influence, then we could see a swift move down in the dollar index.
If it’s the Xi & Putin influence, well, we’re talking about the very survival of the dollar itself.
And then again, all eyes will be on the Fed next week.
But does the Fed have any credibility left at this point?
All the Fed has is a bunch of politicians who like to print and spend money that doesn’t exist, a mainstream financial media that pushes the Fed propaganda, and a banking industry behind them looking for government handouts with every chance they can.
They don’t have any credibility left.
All they have is a trading desk in New York and the ability to hide their accounting to not show just how bad things really are.
Rob Kirby would say the Fed has some cheap parlor tricks too, but I’m not even sure the people still fall for it.
With all of that dollar stuff said, the yield on the 10-Year is not sure what it wants to do:
From the surge to the Italian contagion, we’re now right back into the 2.9% to 3.0% range.
Is this a tug of war between the ESF and the Fed?
We’ll see, and soon.
I said this earlier in the week and I’ll say it again – the VIX has been effectively neutered:
In all actuality, if there are big changes coming out of all these big-wig global elitist meetings, in addition to action coming into and out of next week’s FOMC meeting, then it makes sense that the VIX would be smashed this low.
They’re gonna need all the complacency they can get, and they want the markets looking good as possible before it’s all eyes on Fed Head Powell next week.
Let’s end this SD Friday Wrap with something I wrote about just yesterday to very little fan fare – the Russell 2000.
The “Heartbeat of America” just skipped a beat:
The chart asks the question, but I’ll answer it right now –
So far, it’s way too early to tell.
But then again, time will tell.
– Half Dollar
About the Author
U.S. Army Iraq War Combat Veteran Paul “Half Dollar” Eberhart has an AS in Information Systems and Security from Western Technical College and a BA in Spanish from The University of North Carolina at Chapel Hill. Paul dived into gold & silver in 2009 as a natural progression from the prepper community. He is self-studied in the field of economics, an active amateur trader, and a Silver Bug at heart.