Trump Threat Boosts Silver 1 OZ 999 NY (XAG=X)
Silver is steady on Wednesday, after climbing 1.5% on Tuesday. In the European session, silver is trading at $17.11, down $0.03 or 0.19% on the day. With the U.S. releasing key reports, we could see stronger movement from silver during the day.
Trump Threat Boosts Silver
Silver prices jumped on Tuesday, as investors are becoming increasingly nervous about the prospects of the U.S. and China reaching a trade agreement. On Tuesday, the U.S. House of Representatives voted to sanction Chinese officials involved in a crackdown on the Uighar Moslem minority. In retaliation, Chinese officials are reported to have prepared a list of “unreliable entities”, which could be a broad hint that some U.S. companies will face sanctions. As well, U.S. President Trump told reporters that a deal with China could be delayed until after the U.S. election in 2020. Trump may have intended the remarks in order to pressure China, but they have contributed to risk apprehension and boosted silver prices.
Next – U.S. PMI, ADP Nonfarm Payrolls
Investors will be keeping an eye on key U.S. indicators, which will be released later in the day. The ISM Non-Manufacturing PMI came in at 54.7 in October, and little change is forecast for November, with an estimate of 54.5. This points to respectable expansion in the services sector. As well, ADP Nonfarm Payrolls, which is expected to climb to 137 thousand, up from 125 thousand a month earlier.
Silver Technical Analysis
Silver flexed some muscle on Tuesday, with gains of 1.5 percent. Still, the silver price forecast remains neutral, as the metal remains close to the $17.00 level. The 200-EMA and 50-EMA lines remain relevant and could be headed to a crossover. If the 200-EMA does break above the 50-EMA, this would be a bearish signal (“death cross”).
On the upside, the resistance line of 17.25 is under pressure. It is closely followed by the 50-EMA, at 17.26. Above, there is resistance at 17.75. On the downside, the 200-EMA is at 16.55, a shade above support at 16.50. Below, there is support at the round number of 16.00, a level with psychological significance.
Overall, the bias in prices is: Downwards.
The projected upper bound is: 17.41.
The projected lower bound is: 16.24.
The projected closing price is: 16.82.
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 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 21 white candles and 29 black candles for a net of 8 black candles.
A dark cloud occurred (which indicates that prices moved up strongly on the previous bar, opened higher, but then closed significantly lower). This implies weakness as the momentum appears to be shifting from the bulls to the bears. Note that the lower the close of the black candle (relative to the white candle), the more bearish the dark cloud pattern.
An engulfing bearish line occurred (where a black candle’s real body completely contains the previous white candle’s real body). The engulfing bearish pattern is bearish during an uptrend. It then signifies that the momentum may be shifting from the bulls to the bears.
If the engulfing bearish pattern occurs during a downtrend (which appears to be the case with PREC.M.XAG=), it may be a last engulfing bottom which indicates a bullish reversal. The test to see if this is the case is if the next candle closes above the bottom the current (black) candle’s real body.
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 45.5246. This is not an overbought or oversold reading. The last signal was a sell 8 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 42.06. 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 64 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 -26. This is not a topping or bottoming area. The last signal was a buy 15 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 buy 9 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAG= closed down -0.318 at 16.843. Volume was 8,900% above average (trending) and Bollinger Bands were 73% narrower than normal.
Open High Low Close Volume___
17.161 17.295 16.760 16.843 44,192
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 16.98 17.37 16.21
Volatility: 18 21 24
Volume: 4,419 884 221
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 3.9% above its 200-period moving average and is in an downward 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 bearish on XAG= and have had this outlook for the last 18 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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