Silver 1 OZ 999 NY (XAG=X) The Fed Helps Almost All Asset Classes
The most important catalyst for all asset classes today is the U.S. Federal Reserve decision to expand its quantitative easing program. Due to the severity of the coronavirus crisis, the Fed decided that it will not set any limits to its market support program.
This news is bullish for the absolute majority of assets since it guarantees that more money will be pumped into the financial system. The biggest loser from the announcement is the U.S. dollar. In my previous article, I noted that silver needed a pause in the U.S. dollar upside to have a real chance to go up, and now this pause is provided by the Fed.
It remains to be seen how long the enthusiasm will last because the coronavirus crisis is getting worse day by day. At this point, silver needs general optimism in the markets because any panic selling means that investors also liquidate their silver holdings.
In recent trading sessions, silver prices were trying to secure a bottom in the $11.70 – $12.00 range, and the Fed decision is a timely help for the bottoming process. However, I’d note that the Fed has fired its biggest shot and it has nothing comparable left in its ammo. From now on, silver and other assets cannot expect additional positive news of this magnitude, so further improvement should come from the coronavirus front.
Overall, the bias in prices is: Downwards.
Note: this chart shows extraordinary price action to the downside.
By the way, prices are vulnerable to a correction towards 15.75.
The projected upper bound is: 14.45.
The projected lower bound is: 11.86.
The projected closing price is: 13.16.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 25 white candles and 25 black candles.
Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.
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 32.9554. This is not an overbought or oversold reading. The last signal was a buy 0 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 29.99. This is where it usually bottoms. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 53 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 -67. This is not a topping or bottoming area. The last signal was a buy 1 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 17 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAG= closed up 0.670 at 13.250. Volume was 8,900% above average (trending) and Bollinger Bands were 403% wider than normal.
Open High Low Close Volume___
12.570 13.270 12.241 13.250 42,247
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 13.95 16.98 17.05
Volatility: 99 55 36
Volume: 4,225 845 211
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 22.3% below 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 16 periods. Our momentum oscillator is currently indicating that XAG= is currently in an oversold condition.