Today marks a moment in history for your friendly Gold Enthusiast. Due to increasing requests, we’re starting coverage of the world of silver as well as gold. Because we want to make this as easy for you as possible we’ll be covering gold Monday – Wednesday – Friday, and silver Tuesday – Thursday. So if you’re only interested in one or the other you’ll know when to watch!
Let’s get right into it. Any time you start following a new market sector you should first get a handle on where it is right now, compared to recent history. Being fundamental followers and technical traders, this is usually much easier than you might think. The place to start is also where everything ends, which is the price. So let’s look at the 1-year chart for the unleveraged ETF SLV
and see what it says about the US silver market.
Well, that’s about the easiest opening pitch we’ve seen for a while. Silver is just about bang-splat in the middle of its yearly range. (as they say across the Pond) Yearly high is 16.35 and low is 13.11, so 14.90 is literally just a few cents off the middle of the range.
The current pattern is higher-highs and higher-lows, indicating an uptrend. Right now SLV is in the middle of the range defined by the most recent high and the most recent low, so it’s in no-man’s land. Meaning there’s not a good risk-reward trade at the moment – a rational trader would wait until it either dropped to 14.60 or rose to 15.20 to evaluate conditions for a long or short trade.
Perhaps most tellingly, SLV recently formed a golden cross – the 50-day simple moving average crossed up through the 200-day moving average, and SLV is above its 200 day SMA. This tells long-term investors and traders that a bull market might be in progress in the sector.
So there we have it – a possible bull market and a trade possibly coming soon. We’re thinking the next thing to do is go look for sector-leading stocks… What do you think? Let us know in the Comments below what you’d like to see us cover in the world of silver.
The Gold Enthusiast
DISCLAIMER: The author holds no position in any security mentioned in this article, and has no plans to enter a trade in the next 48 hours.
About the Author: Mike Hammer
For 30-plus years, Mike Hammer has been an ardent follower, and often-times trader, of gold and silver. With his own money, he began trading in ‘86 and has seen the market at its highest highs and lowest lows, which includes the Black Monday Crash in ‘87, the Crash of ‘08, and the Flash Crash of 2010. Throughout all of this, he’s been on the great side of winning, and sometimes, the hard side of losing. For the past eight years, he’s mentored others about the fine art of trading stocks and ETFs at the Adam Mesh Trading Group More...