Sunday, April 22, 2012

Silver rally or continued downtrend?

Below is a daily chart of Silver over the last 3 years.  Since the high that was produced in the early part of 2011, Silver can be seen in a technical downtrend indicated by the blue trendlines.

A technician can say that it is producing mid to long term lower highs and lower lows, the definition of a technical down trend.  Silver is also trading below the 50 and 200 day moving average which is bearish.

On the positive side (for the bulls out there), even though the chart may be seen in a downtrend, the RSI is on a uptrend. Technician's call this a divergence and may lead to higher prices sometime in the future...? 

See the question marks under the green upward arrow...   Why the question marks?  Although this divergence is seen as a potential upwards bias in the future, price manipulation can swing prices and investor psychology away from this market faster than dropping a hot potato. 

Why would anyone invest in the Silver market when you know that the CME can raise margin requirements any time they please and drop the price by 10%+ in a day? (While they go short and make a killing along with those at the CFTC).   It's safer to trade AAPL or Amazon, etc...

The cartel will eventually want to make some $$$ going long at some time as they cannot control the LONG TERM trend which is up.  As long as worldwide countries race to debase, Silver will be a great investment for long term holders.


  1. What happens when the dollar becomes worthless? What will the graph look like? LMAO

  2. I really don't know for certain that the USD will be worthless someday in the future. Government may step in at some point and time and reinstate the Gold Standard. Listen to Financial Sense this week with Jim Puplava, there is speculation from some that the Government will need to do this at some point in the future.