Make preparations for a multi-month consolidation in silver and find something else to obsess over, else I will see to it that you will turn into a pile of ashes.
-Boyd “Silver Bones” Crowder, JakeGint’s evil cousin.
______________
AN IMPORTANT MESSAGE FROM JAKEGINT’S EVIL COUSIN
Say it isn’t so!!!
LOL, thanks Chess
I was waiting for you to point this out.
silver was down hard today (healthy pullback), and that’s a hammer, bullish reversal candle, IMO more indicative of a move up. The day is also not over, so we’ll see what the final candle turns out.
The placement of the candle is extremely relevant. Hammers after a prior steep UPtrend are called “Hanging Men” and are much more indicative of an imminent reversal.
How on earth can something that’s gone up 30+% in a month with no pullback be a bullish reversal?
Though a big silver correction is possible, and technical guys all generally say “overdue” it is important to remember that silver is becoming looked at around the world as a currency. As the US dollar and other debt-based currency systems gets scarier and scarier to have all of your assets in, physical gold and silver look like fine alternatives that can’t have debts arbitrarily affixed to them, and its harder to tax gains on a bar of silver. Silver to gold production is about 7:1, yet the silver price to gold price ratio is still 32:1 even though there is less above ground supply of silver to invest in due to its industrial usage. While there may be a short term pull-back, I’ll be surprised if it isn’t just stepping in a gopher while climbing a mountain.
“Silver to gold production is about 7:1”
Don’t you mean silver to gold production?
n.b. even though there 8/9x more gold than silver available, recently “investors” have been buying $2.50 – $5.00 worth of silver for every dollar spent on gold.
couldn’t get edit to work
“Silver to gold production is about 7:1″
Don’t you mean gold to silver production is 8:1?
No. More silver is still produced than gold. Just that most of the silver has been used up industrially, whether in granny’s silverware, your ipod, your wife’s silver-nanotechnology dishrag, in photo processing spills, in warheads, in vehicles, in solar panels, etc., doesn’t really matter. Most of that isn’t still laying around available for investment (unlike gold). I don’t think silver price will hit 1:1 with gold like some people suggest. But I do think it could hit silver price : gold price of 1:5 in a mania phase. Also, most silver production is as a bi-product of zinc/copper mining. If the economy slows a lot, then silver production from those mines will slow, coincident with increased demand for non-fiat currencies. Gold production is much less dependent on polymetallic mines. Where did you get 8:1?
“Volume confirms blowoff”? I’m not really a technical guy, but I thought a big move higher on low volume meant the move was unsupported (as opposed to high volume).
There are more grey areas than that. When you have a parabolic move higher in price with very strong volume, it is more indicative of a blowoff stage than of a continuation higher (such as when a stock breaks out from consolidation on strong volume).
Thanks. Btw; Great photo! (assuming it isn’t your shifter knob).
163 million shares and counting traded on SLV
half of that has to be shorts
+ the divergence in miners
I am drooling over here but do I know better?
I agree with you. It is textbook blowoff.
http://www.guppytraders.com/gup345.shtml
Out of $UGL and $AGQ. I need some sleep. I’ll let the long black candle burn.
J.I.G.
Look back in November and you’ll see nearly the exact same candle and volume pattern. It took less than one month to work through that and move to new highs.
You are right, my mistake. In this context it is a hanging man. IMO, I don’t think the bearish picture jives with the other indicators I see. It seems like a healthy pullback.
Would you think its more appropriate to chart the spot or futures price of silver? I think the fact that it is an ETF, skews our perception of how it should be charted. Noted, that the blow-off volume profile is also noticeable on /SI futures.