Silver Smashed The Target Early; Now I See 3 Options

On the 24th of July, silver had reached the target of $16.6, which I had set in June when the price was at $14.55. It finished that move way ahead of time as the time target; Now on the 2nd of September. It took the poor man’s gold only 41 bars to arrive at the destination instead of amazingly equal periods of 69 bars in AB and BC segments.

Quite often silver makes a surprise for the market as it was submissive before and now it lives in the clouds like an eagle outshining the gold.

Let’s see how you had predicted the future of silver in the poll below.

Silver

No questions, it was one of the clearest ballots on the blog. The majority with absolute dominance had chosen the success of the bullish move and were right, again! Last time one of the readers expressed his fears about those facts that the majority in the ballots predicts very well so far. Here is more fantastic proof! Maybe this is what we call the power of the Hive Mind (Collective Intelligence).

What’s next? Continue reading "Silver Smashed The Target Early; Now I See 3 Options"

Gold Takes Off, Silver To Follow?

In the middle of May, I questioned if the Head & Shoulders pattern, that was detected in April was still intact. Most of you agreed that there was enough evidence to drop that bearish idea, moreover, the new Bull Flag pattern was spotted on the weekly master chart.

Besides that, one of the readers kindly enriched our view, noticing another bullish Cup & Handel pattern that supported the upside expectation.

Last Friday, the gold took off its upside journey as the Bull Flag was breached to the North as price finally moved beyond the $1300 handle and overcame the minor top established on the 14th of May. The targets were set before, let’s hope for the best!

But what about silver? Last time I wrote about it in January using experimental clones from history. This metal had an ugly chart structure as gold had a clearer one. But no matter how the market tries to confuse us sooner or later we will see the end anyway. Again silver has been a laggard behind gold, and the latter gives us a clue as it broke up the resistance.

Let’s see, in the chart below if we can find gold’s shining in the silver market. Continue reading "Gold Takes Off, Silver To Follow?"

Precious Metals: Wash, Rinse...

Before the promotional corners of the gold community start with the conspiracies, excuse making and general placing of blame everywhere but where it belongs, let’s simply note that this correction was indicated (by sentiment) as far back as February 22nd. On that day I made a post quoting three anonymous sources within the community, firing up the troops to be hyper bullish… as in a gold price of $1400 promptly before a “parabolic slingshot” on the way to $3000 off of a “gargantuan pattern” (that had not even appeared yet and was but a figment of a fertile imagination).

The quotes and targets were compliments of different sources melded together for a mouthwatering smorgasbord of greed for gold bugs to sink their teeth into. It was a classic contrary indicator as the sector was touted far and wide while already overbought and obviously bullish. It was confirmation of the greediest hopes of the greediest and/or newest, most naive gold bugs (putting aside for a minute that gold itself is not a price play, but a value play within the leverage-rigged casino called the financial markets).

We are all wrong at times. My point here is that you can state your case humbly, be wrong and try to do better next time or you can state your case in an emotionally charged manner, suck in some newbies, be wrong and then do it the hell again!… and again… and again. That is what I have observed over nearly 20 years of closely watching the sector. The spin cycle repeats over and over because new marks are being minted in the markets all the time. Continue reading "Precious Metals: Wash, Rinse..."

Gold And Silver Still On The Road To A Low Risk Setup

From a post on gold and silver on Tuesday…

Very simply, if it’s an H&S it’s a minor one with a target to the SMA 200 or short-term lateral support. Gold has curled back up to test the underside of its SMA 50. A takeout of 1310 and then the March high could put yeller back in business. Otherwise, don’t personalize it. A test of the SMA 200 would be normal.

The H&S was not my thing. I tend not to get overly excited about short-term patterns and surely do not announce them far and wide to stir people up. It was a product of the gold community, some members of which have been flipping in head-spinning fashion between bullish and bearish views. I note it again because I don’t want that stink on me. The upside and downside parameters above were my stuff.

Per the NFTRH Trade Log, I shorted a chunk of GLD yesterday (while remaining long gold stocks and even more so, cyclical assets on balance) as gold poked the SMA 50 per the Futures chart below. Gold’s pullback today was not engineered by the Fed or da Boyz or da PPT, PtB, Trump, Mnuchin or some nefarious super algo. It’s normal. Okay, conspiracy mongers? N.O.R.M.A.L.

Click the chart for a clearer view of gold’s situation at the SMA 50. If it does not clear the March high the SMA 200 (at least) continues to yawn with its gaping maw. 1240 is also doable.

gold

Silver looks particularly lame, but ironically this is the metal I am expecting to bottom first with the question being the two noted (green) support areas. Don’t rule out 14.50. Continue reading "Gold And Silver Still On The Road To A Low Risk Setup"

Pendulum Experiment No.2: Another Success! Let’s Push It Again!

Aibek Burabayev - INO.com Contributor - Metals


This is the summary of the second experiment that I started in the middle of 2016 where we put the ultimate loser – the stock index of struggling Japanese economy against the top gaining favorite metal – silver.

Chart 1. Voting results July 2016: The Majority Bet Against The Success Of Experiment!

INO.com Poll Silver vs. Nikkei

Above is the result of the voting for these totally different instruments from 6 months ago. This time, congratulations are only to me as an experimenter as I voted for the Nikkei (every time I vote for experiment success, not for an individual instrument) and to another single person (total two votes for the Nikkei), who went against the majority. If you are reading this post please write your name in the comment, let the community meet you.

I think, this time, the majority was ultra-biased and bet on silver. I am afraid to imagine what would be the voting results if gold was the among bets 🙂 Previously, the votes split almost even with a minimal advantage in favor of palladium.

Chart 2. Nikkei Vs. Silver: The Worst Performing Japanese Stock Index Defeated The Top Gaining Metal

Chart 2. Nikkei Vs. Silver
Chart courtesy of tradingview.com

I think we witnessed the maximum divergence at 22% between these two instruments when I posted a snapshot of the experiment last October. But the final outcome is just astonishing! The Nikkei hit above the +20% handle while the silver also hit the 20% mark but with a minus sign. It is easy to calculate that the divergence peaked above the 40% mark. It means that for the past half year those who sold the silver and bought the Nikkei could book more than 40% of the trade in 6 months.

This is the second straight success of an experiment! I think it was lucky to choose that very period of 6 months for an experiment during which the Pendulum Effect of the market has enough time to take action. And another amazing regularity, which is clearly seen on the chart: the maximum divergence of instruments at the end of an experiment.

Let’s push the Pendulum again to have more records for more reliability.

Chart 3. Comparative Histogram Half Year Futures Performance (January 3rd, 2017)

Chart 3. Comparative Histogram Half Year Futures Performance (January 3rd, 2017)
Chart courtesy of finviz.com

It looks like the Nikkei is the futures’ superstar for the past half year as it beat not only silver, but all the rest of the futures and topped the ranking. It transformed from the “complete non-entity” into a “superhero” just in 6 months amid the Bank of Japan’s asset purchases.

Silver finished 3rd from the end of the list and showed the worst performance among metals in the second half of 2016.

It is ridiculous, but we should put them against each other again in a new Pendulum experiment. Please vote at the end of the post for one of these instruments to show me your preference.
I already posted the fresh silver chart last month and this time I will update the Nikkei chart which was posted last October.

Chart 4. Nikkei Weekly: Magic 78.6%

Chart 4. Nikkei Weekly w/Fibonacci
Chart courtesy of tradingview.com

The Nikkei index is in the giant range set by the 2015 top at ¥20953 and the 2016 bottom at ¥14864. This instrument is very good for positioning as it moves actively like a shark, which needs to move steadily to breathe and stay alive.

Last October we witnessed a breakup of the resistance (black), after that we can see that the price continued higher in the direction of the break. Price rocketed ¥17k to ¥19k level, but then it stalled ahead of 78.6% Fibonacci retracement level set at ¥19650 mark. The index has lost more than a half thousand already after reversal. This setback can start another drop down to the broken resistance at least or even lower to the range’s bottom highlighted in-dash red horizontal line. The break above the 78.6% Fibonacci level opens the way to the previous top at ¥20953.The risk/reward ratio favors short entry as resistance is closer than the support.

What do you think will happen in the middle of 2017?

View Results

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Intelligent trades!

Aibek Burabayev
INO.com Contributor, Metals

Disclosure: This contributor has no positions in any stocks mentioned in this article. This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation (other than from INO.com) for their opinion.