Silver 1 OZ 999 NY (XAG=X) Can Shine
All things “risk on” have rallied during the trading session on Wednesday, as there is hope that a drug coming out of Gilead will work against the coronavirus. That being said, the idea is that everything is going to be some again, and the economy is going to turn on like a light switch.
If that is going to be the case, then silver will be in big demand again as industrial uses abound. However, there is also the precious metals aspect of silver that can work in its favor also, so at the end of the day it is likely that the market is going to favor the upside. At this point it is only a matter of trying to figure out what the narrative is that pushes silver higher over the longer term.
Shayne Heffernan Trade Idea
“The precious metal aspect of silver of course comes into play as people are concerned about the global economy, but during the day on Wednesday it was all about “Hopium. Because of this it rally but at the end of the day we need to pay attention to the 50 day EMA that is offering a little bit of resistance. I do believe that it is only a matter of time before we break down and go looking towards the $14.50 level. At this point in time, I am a buyer and not a seller but do recognize that we could get a little bit of a pullback. I have been buying silver for a longer-term position in little bits and pieces.” Shayne Heffernan PhD in Economics
Why This Matters
The weak U.S. Initial Jobless Claims data has likely served as the catalyst for the rapid downside move in silver. In addition, it is likely that the failed test of the 50 EMA level also increased some traders’ desire to get out of silver.
Previously, market participants were able to shrug off negative economic data, but today the market is not ready to ignore the weak unemployment report, and the U.S. equity market is losing ground.
Yesterday, the Fed signaled that it still had additional resources to support the economy if necessary, and that’s bullish for the precious metal segment and bearish for the U.S. dollar.
However, the U.S. dollar managed to hold on to its previous levels and the U.S. Dollar Index stays just below the psychologically important 100 level.
Meanwhile, gold also experienced a sell-off but still stays near the crucial $1700 level. A sell-off in gold could trigger a corresponding sell-off in silver so silver traders must watch whether gold can stay above the $1700 level.
Overall, the bias in prices is: Downwards.
The projected upper bound is: 16.10.
The projected lower bound is: 13.25.
The projected closing price is: 14.67.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 27 white candles and 23 black candles for a net of 4 white candles.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 40.9049. This is not an overbought or oversold reading. The last signal was a sell 1 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 43.96. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 28 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -153.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 12 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 1 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAG= closed down -0.271 at 14.749. Volume was 8,900% above average (trending) and Bollinger Bands were 64% narrower than normal.
Open High Low Close Volume 14.923 15.031 14.710 14.749 15,772
Technical Outlook Short Term: Neutral Intermediate Term: Bullish Long Term: Bearish
Moving Averages: 10-period 50-period 200-period Close: 15.16 15.29 16.97 Volatility: 29 62 39 Volume: 1,577 315 79
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
PREC.M.XAG= is currently 13.1% below its 200-period moving average and is in an upward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods.
Our volume indicators reflect very strong flows of volume out of XAG= (bearish). Our trend forecasting oscillators are currently bullish on XAG= and have had this outlook for the last 15 periods.
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