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Silver Sign’s Confirmation And More Briefly: In our opinion, full (150% of the regular full position) speculative short positions in gold, silver and mining stocks are justified from the risk/reward perspective at the moment of publishing this alert. In our previous free analysis we discussed the silver market viewed from the non-USD perspective and we commented on the possibility of seeing a more visible corrective downswing in the USD after it moved closer to the 96 level. In today’s essay, we would like to further elaborate on the white metal – not only because we saw another sign in the non-USD silver price, but also because we would like to reveal a technique that can tell us when the next reversal in silver is likely to take place. The thing that’s happening on the chart below is the spike in volume (ratio of volumes). While it may sound esoteric and odd that we’re analyzing the ratio between the volume of silver and one of some ETF, please note that it has significant predictive value. Let’s jump right into charts, starting with the silver to UDN ratio (chart courtesy of http://stockcharts.com). This ratio means that silver’s USD price that we usually analyze is multiplied by various currency exchange rates (i.a. the EUR/USD) and then these prices are averaged with weights just as in the USD Index. The thing that’s happening on the above chart is the spike in volume (ratio of volumes). While it may sound esoteric and odd that we’re analyzing the ratio between the volume of silver and one of some ETF, please note that it has significant predictive value. The huge volume readings preceded major declines (we marked those situations with red rectangles) and since we just saw this signal once again, the implications are bearish. On a side note, when we previously commented on the ratio of volumes between silver and UDN, we called it silver’s hidden signal as that’s something that many investors and professional analysts are not aware of. Let’s stay with silver for a while. In Friday’s alert, we wrote the following:
There are two reasons for quoting the above:
Summing up, it seems that silver is going to decline significantly in the coming weeks and months, but we should not be surprised by an interim corrective upswing (possibly triggered by a reversal in the USD Index when the latter moves close to the 96 level). The awareness of a specific turning point in the first days of December is something that will become particularly important once we get closer to this date - it will be very useful in connection with the direction in which silver will move in the final part of November. Thank you. Przemyslaw Radomski, CFA Founder, Editor-in-chief, Gold & Silver Fund Manager Sunshine Profits - Tools for Effective Gold & Silver Investments
* * * * * All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
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