Silver 1 OZ 999 NY (XAG=X) Markets Slam Into 200 Day EMA After Surprise Rate Cut
Silver markets have been rallying during the trading session after the surprise 50 basis point rate cut during the session by the Federal Reserve. This of course had money flowing into the precious metals markets, because of course the US dollar has gotten hammered. Ultimately, this is a market that will continue to be very noisy and difficult to deal with but it should be noted that we were in a longer term uptrend to begin with, and with central banks around the world looking to add liquidity to the marketplace, it does make sense that precious metals in general will continue to get a bit of a bid.
On a daily close above the 200 day EMA that opens up the idea of a move towards the 50 day EMA, which of course is crucial. Ultimately, I think that the market will go looking to higher levels, due to the fact that central banks around the world will certainly follow suit. Furthermore, there is a bit of a safety bid attached to silver, and perhaps if China gets back to work there might even be a little bit more in the way of more industrial demand which would be quite nice.
As far as selling is concerned, I think that if we were to turn around a break down below the massive negative candlestick, then the market could go looking towards the $16.00 level next. That being said though, it’s difficult to imagine the central banks are suddenly going to do anything to cause precious metals to suddenly lose monetary value.
Overall, the bias in prices is: Downwards.
By the way, prices are vulnerable to a correction towards 17.65.
The projected upper bound is: 17.90.
The projected lower bound is: 16.33.
The projected closing price is: 17.12.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 27 white candles and 22 black candles for a net of 5 white candles.
A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.
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 33.4873. This is not an overbought or oversold reading. The last signal was a buy 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 41.22. 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 sell 40 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 -87. This is not a topping or bottoming area. The last signal was a buy 0 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 4 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAG= closed down -0.051 at 17.129. Volume was 8,900% above average (trending) and Bollinger Bands were 76% wider than normal.
Open High Low Close Volume___
17.172 17.330 17.090 17.129 32,332
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 17.67 17.83 17.05
Volatility: 44 28 27
Volume: 3,233 647 162
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 0.4% above its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect very strong flows of volume into XAG= (bullish). Our trend forecasting oscillators are currently bearish on XAG= and have had this outlook for the last 3 periods.