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Ardent Listener
Administrator
USA
4841 Posts |
 Posted - 12/14/2009 : 19:12:16
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Silver Rising Bearish Wedge Price Pattern
Silver Rising Bearish Wedge Price Pattern
Commodities / Gold & Silver 2009
Dec 13, 2009 - 11:59 AM
By: Clive_Maund
A bizarre anomaly of gold's recent strong runup was the unusually poor performance of silver, which normally outpaces gold noticably during the middle and later stages of an uptrend. It did not gain any serious traction and is already back below its September peak. The fact that it did not even manage to break out to new highs is taken as a non-confirmation of gold's move, as is the failure of the PM stock indices to make new highs, and is viewed as bearish for the sector over the intermediate-term, meaning the coming 2 to 6 months.
We can see silver's recent pedestrian performance to advantage on its 2-year chart. In addition to the stalling out at the resistance around last year's highs, with an attendant decline in upside momentum as shown by the RSI and MACD indicators at the top and bottom of the chart, we can see a marked convergence of the major uptrend channel in force from last October. It looks like a bearish Rising Wedge, although the parallel channel with a lower support line running beneath the April and July lows introduces an element of doubt into this interpretation. If it is a valid Rising Wedge then we can expect the price to break down from the channel in due course, which would be a sell signal as it would open up the risk of a severe decline.
Much now depends on whether gold can hold above its crucial parabolic uptrend and parallel uptrend support - it is drawing very close to this zone of important support in a short-term oversold state. So a bounce is likely soon which should coincide with a bounce in silver. However, other factors, a chief one being the dollar breakout, point to gold going on to crash this support in due course, which would be expected to lead to silver breaking down from its uptrend and plunging.
By Clive Maund
CliveMaund.com
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Think positive. |
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Country
1000+ Penny Miser Member
USA
3121 Posts |
Posted - 12/14/2009 : 19:59:42
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It sure looks like GOLD is consolidating around $1120. It did need to work off it's overbought RSI. It could go lower, but I think there was strong support for GOLD around $1100 when that level was tested a few days ago. Think back and remember how long GOLD consolidated around $950, after it made numerous attempts at the old $1033 high. The BULL market in GOLD, pausing and consolidating just $90 below its all time high, is good.
Likewise, SILVER is consolidating too. Normally, SILVER makes its best appreciation in Q1. If the perception that the economy is improving, SILVER's value as an industrial metal will reduce the GOLD/SILVER ratio from 65 to lower levels.
When will the $USD resume its decline? The $USD was oversold and needs to have its bounce. Notice how speculation quickly becomes common knowledge that the $USD has to bounce by at least 15% or more. IMHO, I think these rumors are a setup so that the $USD shorts can load up the boat for a further decline early next year. Large-cap multi-national stocks, dividend payers, are probably being favored currently in anticipation of further $USD declines next year. |
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Lemon Thrower
1000+ Penny Miser Member
USA
1588 Posts |
Posted - 12/15/2009 : 05:14:27
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| Ed Steer: There are no markets anymore, only interventions. |
Buying:
Peace/Morgan G+ at $15.00
copper cents at 1.3X
wheat pennies at 3X
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Country
1000+ Penny Miser Member
USA
3121 Posts |
Posted - 12/16/2009 : 10:00:06
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Once in a while, the outcome of a rising wedge pattern is a breakout to the upside. We may be seeing the initial rush to the upside today in PMs. I believe that this PM correction will be short lived as the 2009 trend, lower dollar, higher PMs, will reassert itself once again.
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---> Come to the new and improved realcent: http://realcent.org
The things that will destroy America are prosperity-at-any-price, peace-at-any-price, safety-first instead of duty-first, the love of soft living, and the get-rich-quick theory of life.
– Theodore Roosevelt
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Silver Rising Bearish Wedge Price Pattern
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