Silver For The Bulls

London (Jan 1)  Summary•January is a seasonally strong month for silver and markets appear to be supporting the price.

•The USD appears to be weakening and would also support bullish silver.

•Longer term, the USD appears very strong, which could counter a new silver bull market so risk needs to be managed.

Silver is at an important technical price point, with what appears to be an imminent bullish reversal, with silver holding 'over' its May-June daily chart low. Potential investors should be looking for a bullish confirmation opportunity, while noting the risk of a further deep correction from a higher price point in later months.

Both silver and gold should be supported by seasonal demand in January while the holiday season is extended with the Chinese New Year. This trend appears to last until the spring.

silver COT 

The long term silver chart below indicates potential 'head and shoulder patterns', highlighted in yellow along with the lower rising trend line from 1975, which created buying support in 2009. Silver broke the long term Bollinger Bands to the upside before breaking down into a long term consolidation in the 1970's pattern, and needs to hold the long term rising trend, or risk a fall to a horizontal support area (dotted green), now. However, in January, support was provided by the red '200 moving average' line, so the first bullish continuation from a January 'bottom', would be from a similar level. If gold manages to break the January low, (see my article 'Ten Reasons Why Gold Could Break $1000'), that 'could' also jeopardize speculative opinion, and the January low in silver.

Source: SeekingAlphan