Silver – Pushing On A String

Little in the way of news has transpired in the past week that  could have an impact on the silver market.  The main stage has been set for some time, regarding all the known factors affecting silver, to date.  There is no need to review any of them, at this point.

What can be noted is that the CFTC has reached the conclusion that the “alleged” manipulation by JPMorgan in the silver market, well documented and presented to the CFTC by Andrew Macguire, was much ado about nothing..  Just like lackey Eric Holder, chief law [un]enforcement official a the Dept of [no]Justice, has not been able to uncover any wrongdoing by Wall Street over the past 5 years, the CFTC ran into the same “bad luck” during its two-year investigation.

What this tells everyone with an interest in owning gold and silver is that the wheels are coming off the central bankers greed cart, and when that happens, silver will be at or above where most imagine it can go.  Continue to buy and hold.  It is just a matter of time.  How much time will be irrelevant, once it everything falls apart, and fall apart it will.

Our latest view of the market was provided in “Central Bank Death Dance, Part I,” [here, if you did not read it].  It presents a less conventional outlook on what not enough people are taking into consideration in trying to understand why silver has not rallied strongly, based on otherwise very strong demand factors.

This article is more abbreviated for content, as a consequence, so we go directly to the charts, and even they have little to add as price moves in a sideways fashion.

The final close for the monthly chart is Monday, but unless price makes a dramatic move up or down, September has been an “inside range” bar.  It has done little to erase the stronger August rally bar, and for that reason, a slight edge goes to the bulls. What is critical now is for demand to take over and rally price higher.

Sentiment aside, our expectation is for a more protracted sideways range in the months ahead.  We could be wrong, but it is an “odds-on” assessment.  As always, we let market activity make the final determination, as it always does.

Not much can be learned from the weekly and daily charts, so we skip to a few intra days to see if there are developing clues.  The 90 minute chart shows a strong D/S, [Demand over Supply] day on high volume, 18 September.  It did not go much higher, and it set up the upper bound for a TR to follow, unknown at the time.

A few days later, a counter-punch by S/D, [Supply over Demand], on even higher volume. This downside effort also failed to result in any further downside, and it held the lows of the D/S bar, a plus for the buyers.

Not much else can be said as  price has since moved sideways for  five more TDs, letting us know the buyers and sellers are in balance.  What we also know is this form of balance inevitably leads to unbalance, and a directional move can be expected to follow as price moves further along the RHS of the TR, [Right Hand Side of Trading Range.]

Zooming down to a 60 minute chart does not offer a higher degree of clarity, but there are a few developments that appear more positive than otherwise.  Keep in mind, this is an intra day chart, and the lasting effect is weaker than a higher time frame, weekly or daily.

The chart comments give what we see.  As price moves further along the RHS of a TR, the market is closer to reaching an imbalance, and that is where some low-risk entries can be made, if the set-up is clear enough on the lower time frame charts.

The decline for the latter part of Friday was labored after the EUM rally early in the day. [Ease of Upward Movement].  We pay attention to the how of developing market activity, and the EUM is stronger than the labored “correction” that followed.  If we had to take a stand, we would expect more upside on Monday, but that is just a non-committed “guess” because price can open lower.  The market is not concerned about our “guesses,” anyway.

We remain lightly committed to the long side, but the sideways activity has not done much for the position.  Plan accordingly and follow the market’s direction.

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