Silver Hit Hard By Sell-Off in Raw Commodity Sector
Silver prices are solidly lower and near their daily lows in early-afternoon U.S. trading Wednesday. The precious metals sold off in sympathy with a slumping raw commodity sector today, after the U.S. hit China with another volley of trade sanctions. A higher U.S. dollar index today also is a negative for the precious metals markets. August gold futures were last down $10.90 an ounce at $1,244.50. July Comex silver was last down $0.272 at $15.815 an ounce.
Important U.S. economic data out this week included the producer price index for June, which this morning came in at up 0.3% from May, which was hotter than the 2.0% rise that was forecast. The data did not have a significant impact on the precious metals or other markets. The June CPI report on Thursday is also seen up 0.2% from May.
The silver bears have the solid overall near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at this week’s high of $16.25 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $15.55. First resistance is seen at today’s high of $16.00 and then at $16.14. Next support is seen at last week’s low of $15.80 and then at $15.55.
Overall, the bias in prices is: Downwards.
By the way, prices are vulnerable to a correction towards 16.47.
The projected upper bound is: 16.18.
The projected lower bound is: 15.29.
The projected closing price is: 15.73.
A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 24 white candles and 26 black candles for a net of 2 black 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 40.5488. This is not an overbought or oversold reading. The last signal was a buy 12 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 35.19. 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 148 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 -124.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 5 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 0 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAG= closed down -0.302 at 15.744. Volume was -0% below average (neutral) and Bollinger Bands were 50% wider than normal.
Open High Low Close Volume___
16.027 16.057 15.730 15.744 0
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 15.98 16.39 16.62
Volatility: 18 17 20
Volume: 0 0 0
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 5.3% below its 200-period moving average and is in an downward trend. Volatility is high as compared to the average volatility over the last 10 periods. 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 13 periods. The security price has set a new 14-period low while our momentum oscillator has not. This is a bullish divergence.
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