SLV – Andrew Thrasher

The Levels to Be Watching In Silver

Posted on March 24, 2015 by Andrew Thrasher, CMT

While many point to the Federal Reserve as the tide that raises all ships, the boats carrying commodities have all but sank over the last couple of years. Silver ($SLV) has fallen nearly 30% since it’s 2014 high alone and made a series of lower highs and lower lows. It’s hard to argue against the notion that the Silver is in a bear market as each rally gets faded. We can also see signs of this bear market in momentum, with each march higher hitting a brick wall at the upper end of a bearish range.

Below is a weekly chart of the iShares Silver Trust ETF ($SLV) going back to late 2012. After a large drop in 2012 and 2013 silver began to consolidate at created support near $18. However, each rally was unable to get back above the 50-week Moving Average and momentum began defining the range for which it would eventually remain for the coming year. After multiple tests of the support at $18, price eventually broke through and tagged $15 for this ETF. As with many levels of support, once it breaks it often becomes resistance. Which is what we can see took place at the start of this year when Silver bulls tried to gain the majority. But they were unable to get the popular opinion and price failed at $18 and again was unable to break the 50-week MA.

Now with price re-testing $15 for $SLV we have a bullish divergence in the Relative Strength Index (RSI). We saw a similar divergence in June of last year before small rallies took place but ultimately failed. With the RSI making a higher low as price tests a prior low, this a potentially positive sign that price may begin to rally. What’s important to understand with this chart is the defined level of resistance in momentum. The bearish range that the RSI is in has put a quick end to any attempt to see price appreciate and we’ve yet to see the indicator break above this level yet.

Going forward I’ll be watching if the RSI can get materially above 50 and if price can once again break above $18 as well as its 50-week MA. This will likely not be an easy feat for Silver bulls to take on, but it’s important to know where ‘price memory’ is and the levels to keep an eye on.

A second chart of Silver I want to take look at involves Sentiment. The chart below comes from SentimenTrader.com and is a proprietary mix of varies sets of sentiment-related data. As Silver consolidates near $15 I find it interesting to see sentiment begin to put in a series of higher lows from what is deemed an “excessive pessimism” level. Each test of this level in price has been accompanied by, what appears to be, less and less bearish sentiment. This may help give some self-esteem to the bulls as their camp begins to grow in attendance.

Prior rallies from $15 in $SLV have seen sentiment stop out around 60, if we do see price rally I’ll be watching to see if sentiment can break above these two prior highs as a possible sign that a shift in taking place in the Silver market.

Disclaimer: Do not construe anything written in this post or this blog in its entirety as a recommendation, research, or an offer to buy or sell any securities. Everything in this post is meant for educational and entertainment purposes only. I or my affiliates may hold positions in securities mentioned in the blog. Please see my Disclosure page for full disclaimer. Connect with Andrew on Google+, Twitter, and StockTwits.

Can Long-Term Support Hold Up For Silver?

Posted on November 20, 2013 by Andrew Thrasher, CMT

Like gold, silver hasn’t had a great 2013, really it hasn’t a great last three years. What is now, in my opinion, a long-term down trend, its good to look at the historical price action of a market to see if there are any levels of support that might come into play.

Today’s chart is a monthly view of the spot silver ($SI_V) market going back to 2002. The trend line on the chart below looks at the lows off 2003 and 2008. This line has provided pretty good support this year, acting as a base for the nearly 25% advance in August.

We are now back this long-term trend line as well as the 100-month Moving Average. There’s no doubt that the bears are currently in control of silver as shown by the significantly lower lows from the 2011 high. Will this trend line off the 2003 low and 100-MA act as support? So far sellers haven’t eased off the gas or given any hints to the end of their conviction, but we’ll see what happens if we do in fact get a break or if the selling subsides.

Is Silver Breaking Out?

Posted on October 8, 2013 by Andrew Thrasher, CMT

Silver has been one of those assets that has burned traders for most of 2013. Like many commodities, it has drifted lower as investors fled metals in favor of equities. Well with yesterday’s strong move, we may be seeing early signs of a trend change in the silver ($SI_F) market.

Below is a daily chart of the spot price of silver. Looks pretty ugly, doesn’t it? In the top panel we have the Relative Strength Index (RSI), which has been in a bearish range from February through July. We can see that momentum struggled with the 45 level in the RSI indicator each attempt to move higher. By watching the bearish range in the RSI we were able to avoid these short-lived rallies. But things began to change in August. The Relative Strength Index was able to break out of its range and push to above 70, which is deemed ‘overbought’ – exactly what bulls wanted to see.

In the bottom panel of the chart we have the relative performance of $GLD and $SLV, the respective gold and silver ETFs. As the line rose in the first half of 2013 we could see gold outpacing silver. But the rally in silver in August thwarted this trend and silver began to outpace its shiny counterpart.

Now we had the real test as silver began to weaken again in September. Would it be able to hold on to its new bullish range in momentum by staying above 45? It appears so. Yesterday we saw silver break its short-term trend line while getting back above the 50-day moving average. Going forward I’d like to see this trend line break get some confirmation to the upside as traders become more interested. If things continue to be constructive in the silver market, I’ll be watching to see if its able to get back to its 200-day moving average, just under $25. If things don’t work out, then we could see silver dip back below its 50-MA and watch the longer-term down trend continue.

Time Horizon is Important For Silver

Posted on January 28, 2013 by Andrew Thrasher, CMT

I hope everyone had a good weekend. In my article for TraderPlanet this week I take a look at the setup in $silver.

Here is a piece:

Silver has created a triangle formation with the falling blue trend line and rising blue trend line as shown on the chart below. The bottom trend line is just below the 200-day moving average, which provides silver bulls with an extra layer of support so to speak. When looking at momentum, based on the relative strength index in the top panel we can see that each rally attempt is price is creating lower highs in momentum.

Head over to read the rest: A Trade in Silver All Depends on your Time Horizon (TraderPlanet)

Silver Update

Posted on September 5, 2012 by Andrew Thrasher

Silver has been on quite the tear recently, rising around 17% from its July low. I last looked at silver in my post on July 11, titled Has Silver Bottomed Out? when the shiny metal creating a base at the $26 level.

From that support created at $26, silver has reached possible resistance of its 300-day moving average. Below I’ve posted a 10-year chart to show its price action upon reaching its 300-day MA, which it seems to respond pretty well to when tested as support or resistance.

However, when we look at momentum (not shown), it seems there could still be some room for silver to run as the indicators I watch aren’t showing any types of divergences and one still isn’t oversold quite yet. So while some type of consolidation may make sense for silver, it doesn’t mean it has lost all of its juice. As we saw in October 2011 and Feb 2012, silver broke past its 300-MA but soon retreated back below it. We’ll see if today is any different.