We backtested the Main red trendline today as well as the yellow midfork line. Silver could grind slightly higher, but upside should be minimal from this point. I will have more detailed analysis on both Gold and Silver coming shortly.
60min Chart
Tuesday, July 5, 2011
Silver - Last Bounce
My impression is that Silver is working on the last bounce before a major plunge. Silver rallied from a test near the blue Fibonacci fan support. I have been targeting approx $35 for SLV, and we are closing in on that level.
We backtested the Main red trendline today as well as the yellow midfork line. Silver could grind slightly higher, but upside should be minimal from this point. I will have more detailed analysis on both Gold and Silver coming shortly.
60min Chart
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We backtested the Main red trendline today as well as the yellow midfork line. Silver could grind slightly higher, but upside should be minimal from this point. I will have more detailed analysis on both Gold and Silver coming shortly.
60min Chart
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Well, I guess today is judgement day for silver then
ReplyDeleteLet's see what happens, SLV $35 has been solid resistance this morning.
ReplyDeleteMetals looking very bullish here SC.
ReplyDeleteVery tempting to start shorting Silver at these levels. Gold also.
ReplyDeletehaha, I am short from $35 on silver futures....I am extremely confused by these moves and feel as though I should be looking for a long entry at this point. I have an automated system for trading silver that I use on the side and it went short this morning and just went long about 5 minutes ago. It is highly unusual for me to get 2 signals in the same day.
ReplyDeletewell, short from 35.3 on silver futures. still feel quite underwater though
ReplyDeleteThis comment has been removed by the author.
ReplyDeleteTC, I'm very bearish on Silver from this area.
ReplyDeleteThe pattern I have been using has worked well to this point, next move indicated is a steady, steep decline.
from here straight to $27? Or will there be bounces along the way? Should only take a couple of weeks right, SC?
ReplyDeleteLet's say $27 range (give or take), can fine tune later. It should be a steady decline with only small bounces, and a bottom that keeps falling out. Probably not even worth trading bounces. Looking for a steep V-bottom.
ReplyDeleteI don't have a specific date as of yet, but a few weeks does sound about right.
This comment has been removed by the author.
ReplyDeleteTC,
ReplyDeleteI'm amazed that you are trading silver.
SC,
It might be wise to throttle back comments on this site. Your posts alone should help vast majority of traders.
Just saying...
Always a good idea to use precautions TC (stops and know your limits etc). Silver can get wild at times. There are certainly easier things to trade out there when learning.
ReplyDeleteI am pleased with the pattern that I am working off of, and it indicates a decline. Ultimately though it comes down to probabilities not guarantees.
Bottom line, try as we might, as traders we are often wrong. It's just a fact of investing. Risk management is extremely important.
ReplyDeleteAll visitors: make sure to read the disclaimer at the bottom of the page.
Thank you.
SC- you can say it till you are blue in the face, but most traders need to learn risk management the hard way. I had to learn the lesson twice with my full account balance before I finally figured it out. Very expensive lessons at the time, but years later it was a cheap lesson to learn. Point is, pretty much every good trader has had to learn risk management the hard way, so worrying about others with it seems pointless. I hate to see others lose money and wish it could be avoided, but if you are new to the game you are going to lose.
ReplyDeleteBlake, are you shorting silver at this point - around 36?
ReplyDeleteSC, thank you for your posts and comments. I learn from both, so please don't shut the comments off.
Good trading everyone!
BBL- I shorted silver futures at 35.3. I am not adding anymore as I already have a full position. I have an automated system that I created for silver and it went short this morning at 35.6, but then reversed long at 36.2. I think it is wrong this time and is just getting whipsawed a bit. It tends to get whipsawed at turning points, but it catches all of the big moves, so I just let it run independently of my own trading.
ReplyDeleteFor my personal silver short, I don't really have a hard stop, I almost never place hard stops, but I beleive my risk tolerance is higher than most people. I usually close trades when I think something has changed. I will probably be convinced that I need to close this trade out if we close higher in the future than whatever the closing price is today.
Hi SC,
ReplyDeleteI'm the Finance editor at Before It's News. Our site is a People Powered news platform with over 2,500,000 visits a month and growing fast.
We would be honored if we could republish the Cyclical Market Analysis blog rss feed in our Financial Markets category. Our readers need to read what experts like you have to say.
Syndicating to Before It's News is a terrific way to spread the word and grow your audience. If you are interested in syndicating with us, please contact me at
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Thank you
I'm actually kinda selfish to keep not to disclose SC's blog too much. As it sometimes becomes a majority guideline of more general public. Though, people still can find this blog by doing their homework. Just my two cents. Thanks for your hard work, SC.
ReplyDeletesc,
ReplyDeletejust started following the blog. with the recent action in precious metals, do you still think silver will plunge .
thanks for your time
With you on the silver short. Thinking the same as well. Tight stop of course since silver is a wild stallion.
ReplyDeleteI think so Phantom. I've been waiting for this bounce. It shows up as the last bounce before the plunge in a pattern I have been following.
ReplyDeleteThe pattern has been remarkably accurate to this point, and it suggests the bounce should be finishing at these levels with the plunge to follow.
Of course, no guarantee!
Futures just took out the 1345-48 resistance area. Very likely overshoot to 1352-1355. Will that change your mind about a short term top (last you said you expected market stayed below 1348)?
ReplyDelete1343 was the high on futures so far. went there for less than 30 seconds. Algo's just ramming things higher, but not sure if they keep this blind mans bluff market buy order game up overnight. Jobs numbers tomorrow and fib resistance right here. I shorted the spike. Good luck..G-
ReplyDeleteWhen I said 1345-48, I meant cash equivalent level.
ReplyDeleteGeorge, I have the 78.6% retrace on ES around 1346, which is about 1350-51 on SPX cash. I won't be surprised to see that and it won't change my expectation that this is just a bounce (i.e. an Elliott 2nd wave). In my experience - as you alluded to - these things often slightly overshoot the 78.6 and can overshoot into the low 80s. Anything over 1355 (which you mentioned) is the level I have been anticipating as a stop loss. I realize you addressed your question to SC but hope this is helpful.
ReplyDeleteHope this was the last bounce on SPX......
ReplyDeleteAnd the drop begins....
This from my July 3 update:
ReplyDelete"SPX closed Friday at several major resistance trendlines as shown in the charts below. Around July 6th appears to be a bottom in my timing cycles, and I plan to cover shorts at that time, and reshort near 1347 SPX levels."
From my point of view, this move should top out just over the May 31, 1345 SPX high. I mentioned 1347. Nothing magical about that number, just slightly above the 1345 high.
I see we are testing that level, and suspect a quick decline could occur next probably into at least the low 1330's and maybe into the 1320's. After that, ideally one last test of the high to form a double top is preferable with a decline to 1295 area later this month.
If you nail this one TC its amazing! Nah we will see..:-)
ReplyDeleteLets wait and see then..Today would be a good day to go short silver right? Still targeting 27 in SLV..Around there at least? Then the dollar must surge higher..
If silver does not reverse today I will be closing out my shorts. I was pretty confident in a further decline, but buyers are too strong here for me to find a good reason to fight it. If we revers here, then game on.
ReplyDeleteEven with the strong SPX opening still a lower high for financials. Weakness coming.
ReplyDeleteI still really like this spot for the Silver plunge. Gold is weaker than Silver this morning.
ReplyDeletesilver is in a topping pattern on the intraday chart though...it is only intraday price action though, so who knows.
ReplyDeleteAs SC mentioned, gold is weaker than silver this morning, so the gold/silver ratio decrease and thus the risk of decline increasing.
ReplyDeleteIf a back test to 1300 doesn't come sometime next week, I'll need to bail on my August put position; bought too early I guess.
ReplyDeletei believe the latest COT reports are extremely bullish for silver, and some known commentators like clive maund are predicting a huge breakout to the upside for silver.The COT reports were also bullish at the end of april,2011, but they are more reliable during bottoms than tops.if silver doesnt go down soon, would you consider long positions soon, SC.
ReplyDeletethanks for your time again
Yes, there are many commentators looking for Silver to trade back up into the $40's. I'm pretty sure they are wrong on the timing. My pattern indicates a decline under $30 first, then a rally later this year into the $40's.
ReplyDeleteIt's all about price AND timing.
I would never consider long Gold or Silver right at this time. Definitely would need to see PM's stabilize before taking a long position.
It's possible that SPX tests it's highs of 1364-1389, before breaking down. Against all wisdom, I'm betting against July, which statistically is one of the better performing months of the year. There's not much negative sentiment like there was a few months ago, and earnings season is upon us, which may bring further rallies. Have to assess this, but think I'll be selling my puts for a huge loss and buy back in a much better position.
ReplyDeleteI am extremely frustraded with silver today. Buying pressure is very intense at all times.
ReplyDeleteFinancials have really caught up today as well. Really starting to look like a real rally. Miners also still outperforming metals. The bullish signs are starting to mount, do you still see bearish signs SC? Cycles I watch loosely are way off from the action the last week, are yours still working?
ReplyDeletesc,
ReplyDeletethe dollar rallied significantly over this week, despite the dollar rally the precious metals have rallied . have the commercial traders sniffed that the dollar is toast soon and gone long the precious metals?. this would also give some support to the stock market rally.
The financials are only barely above July 1 levels so that is weaker than SPX.
ReplyDeleteI'm very bearish here. In fact, just shorted another big block.
Also higher low for VIX today vs July 1. Leaning towards at least a test of 1335 area tomorrow.
ReplyDeleteI still like the 1295 target for later in July. So far according to my big picture 60min chart.
ReplyDeleteFinancials starting to weak last 15min.
ReplyDeletesilver just building strength all day, not very appealing. Very much considering getting long, even though it is extremely overbought. Quite a ways above your 35 target SC, does this not affect your analysis at all?
ReplyDeletePhantom: Clive Maund has been very bearish, not bullish, on silver in recent weeks. Not only silver, but gold and equities as well. See his recent articles on safehaven.com
ReplyDeleteStill within range for Silver in my opinion Blake. Mkts are feeling really toppy here to me. Quite sure sharp decline (short term)kicking off soon. Could start today or at latest tomorrow.
ReplyDeletetom,
ReplyDeletei subscribe to clive maund, on tuesday morning premarket, he sent out an alert that silver is going to breakout big. yes he was bearish last month, but he also stated that if the HUI breaks out of the "dome", he would reconsider his position. i respect people who are willing to change their views depending upon the situation, rather being stubborn.
Starting to see a H&S pattern in SPX. Held on to Aug puts.
ReplyDelete