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Will Silver Make New 2017 Lows?

By Patrick MontesDeOcaCommoditiesNov 12, 2017 01:43AM ET
www.investing.com/analysis/will-silver-make-new-2017-lows-200264061
Will Silver Make New 2017 Lows?
By Patrick MontesDeOca   |  Nov 12, 2017 01:43AM ET
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Special Gold and Silver Report

We are getting a strong confirmation based on an intermediate- and long-term supply and demand basis (mean reversion) that the gold and silver markets are about to break out to the upside with the possibility of challenging the September highs by the end of 2017.

GOLD

Weekly Price Indicator
Weekly Price Indicator

As we look at the proprietary Variable Changing Price Momentum Indicator (VC PMI) gold weekly S&D report, we can see that the sell 1 level or the extreme above the mean for the week of $1281 has been activated, since the market traded above $1281. In crossing the mean or average price of $1273, we have been able to anticipate that the supply and demand levels for the rest of the week will be $1281, which will be the first target of supply, and $1292 (sell 2), which is the upper end of the extreme above the mean of $1273 or the weekly average price. A weekly close below the mean or average price of $1273 would negate this analysis to neutral.

WEEKLY GOLD S&D LEVELS

Weekly Gold
Weekly Gold

GOLD

Monthly Price Indicator
Monthly Price Indicator

As we look at the VC PMI gold S&D monthly report, we can see that the sell 1 level or the extreme above the mean for the month of $1298 has been activated, since the market traded above $1281. In crossing the mean or average price of $1281, we have been able to anticipate that the supply and demand levels for the rest of the month will be $1298, which will be the first target of supply, and $1326 (sell 2), which is the upper end of the extreme above the mean of $1281. A monthly close below the mean of $1281 would negate this analysis to neutral.

MONTHLY GOLD S&D LEVELS

Monthly Gold
Monthly Gold

SILVER

Our bullish S&D analysis for silver is based on three confirmations of previous lows: October 6 at $16.3450; October 7 at $16.0950; and October 27 at $16.61. Technically speaking, this kind of technical formation is considered a triple bottom. If we include the low of $15.14 made on July 7, it would make this the fourth time these support (demand) levels have been tested. A weekly close above $17.10 will re-enter the weekly uptrend and validate a potential rally back up to test the September (supply) highs of $18.29.

SILVER

Weekly Price Indicator
Weekly Price Indicator

As we look at the weekly S&D VC PMI automated algorithm for silver, we’ve identified for this week buy 1 levels activated at $16.57. A secondary level of $16.31 was activated on October 6.

These events fit into a perfect alignment and show a harmonic timing between the weekly and monthly VC PMI S&D indicators. This alignment is one of the highest probability factors that we use to confirm that we have a better than 90% probability that reversion to the mean will occur to the extreme above the mean. This means that prices are likely to move above $17.51 for the weekly targets (sell 2 level). We have already accomplished the first target of $17.17 (sell 1 level). The market by breaking out above the sell 2 level of $17.51 will be breaking out of this weekly pattern, confirming the possibility that the September highs of $18.26 (supply) are going to be tested. For downside protection, I recommend using the weekly close below (buy 2 level) of $16.31 to go neutral.

SILVER WEEKLY S&D LEVELS

Silver Weekly
Silver Weekly

SILVER MONTHLY S&D LEVELS

Monthly Price Indicator
Monthly Price Indicator

As we look at the VC PMI silver monthly report, we can see that the sell 1 level or the extreme above the mean for the month of $17.34 has been activated, since the market traded above $16.85. In crossing the mean or average price of $16.85, we have been able to anticipate that the supply and demand levels for the rest of the month will be $17.34, which will be the first target of supply, and $18.00 (sell 2) which is the upper end of the extreme above the weekly mean of $16.85. For downside protection, I recommend using a monthly close below the mean of $16.31 to go neutral.

SILVER MONTHLY S&D LEVELS

Silver Monthly
Silver Monthly

Will Silver Make New 2017 Lows?
 
Will Silver Make New 2017 Lows?

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