Unlike gold, silver is still some way above its long-term uptrend line, which should hold the price if gold holds above its similar long-term uptrend line, and it is here that a major reversal may occur. However, if gold should break below its long-term uptrend line and head towards its strong long-term support level at about $1000, then it is likely that silver will crash its long-term uptrend line and drop away steeply, especially given its present frail and vulnerable condition.
We have seen a substantial improvement in silver’s COT charts in the weeks following its February - March high, and while this has opened up the possibility of a rally, there is still plenty of room for improvement in these COTs, which means that there is still plenty of downside potential for silver.
Chart courtesy of www.sentimentrader.com
Public opinion on silver is still in middling ground, which in itself is neither bullish no bearish.
Finally we will look briefly at the latest general commodities COT chart, which shows an astounding shift in positions over the past several months. This chart has rocketed deep into a bearish extreme reading, which does not bode well for commodities as a group at all – what this implies is that commodities will be shot down in flames along with the broad market before much longer. Here we should note that this indicator can lead, and make extreme readings some time before commodities hit a peak, but nevertheless it warns of a looming serious reversal.
© 2004-2013 Clive Maund. Legal & Disclaimer
for billing & subscription questions: firstname.lastname@example.org
for all other inquiries: email@example.com
The above represents the opinion and analysis of Mr Maund, based on data available to him, at the time of writing. Mr Maund's opinions are his own, and are not a recommendation or an offer to buy or sell securities.
Mr Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications.
Although a qualified and experienced stockmarket analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr Maund’s opinions on the market and stocks can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction.