From Bill Downey ... Silver charts

Seeing as everyone keeps asking about Silver I asked Bill Downey at if it would be OK to post his latest. Bill offers a subscription based news letter with no nonsense advice for the serious trader. Sorry I couldn't get this out earlier but life interrupted.
Click the charts to make them bigger after the read more

The Monthly chart in silver shows the critical price point we’ve reached.  Notice how price is on the verge of giving way to a channel that has supported price ever since the first crash wave from 2011.  More important is this support line is SEVEN years old and breaking this line on a MONTHLY CLOSING BASIS would add bearishness to the longer term trends and potentially could become a key resistance point.  At the same time notice the two moving averages (Blue and Red).  These long term averages are key momentum gauges.  The ONLY TIME that price has broken the lower RED average was during the 2008 crash (about mid way through it). 

It took 8 full months to get back above and price dropped over 25% once that average was broken on a monthly closing basis.  Last THURSDAY’s close at 28.32 was BELOW the average (28.62).  With the break of the channel line and the moving average, the LONGTERM trend is in danger of moving from bullish to neutral but more important and as a COMPARISON, if silver were to perform in the same manner as the last it broke this average, silver would reach 19 dollars and would be back above this area until 2014.  So it is paramount that silver finds support near here and turn around as there’s not much room before STOP LOSS and MARGIN selling comes into play. In summary,  the medium term trend is down and the longer term trends are under attack.  It’s best to remain DEFENSIVE with silver at the moment and hope that the seasonal trends that favor prices for metals in April/May arrives quickly

Short Term Silver Chart

Short term trends are currently down hard also.  The choppy and overlapping patterns are hardly ever bullish and usually resolve to the downside.   We’ve reached a key support area today of 27.25-27.40.  Additional support is the line at 26.25-26.50.  The support reached today should provide a bounce but since the pattern is so bearish,  it’s best to remain defensive until we see some type of supportive price action.  This 27.25 area is important because as we saw on the monthly chart, we don’t want to go much lower in silver as it could prompt another wave of selling.  In summary, the metals remain under pressure and until we see prices that reverse and show sustaining power,  its best to favor the downside and remain defensive.  This area and seasonal timeframe is important for silver if there is to be price bottom developing. Otherwise the downside can accelerate quickly here.


Bullion Baron said...

Silver has just hit a decade low according to Sentiment Trader.

Large speculators have huge position short on the COMEX, numbers not seen since 2005.

Still above US$26, important price support.

IMO this is all leading to scenario for massive short covering rally when the worm does turn.

Fair enough for traders to remain defensive, but IMO for the speculator or investor with a long term view current price presents a great buying opportunity.

Bullion Baron said...

Sorry in above comment I meant a decade low for sentiment (yes even below 2008 crash levels), not price obviously. See this chart:

Anonymous said...

"So it is paramount that silver finds support near here and turn around"

The problem with Silver (once you forget industrial use) is it is only bought by the average person like you and me (not me anymore). This is it's weakness. People have all piled into Silver because of the hype put out by numerous sites "specialising" Silver. These Silver sites have been doing rather well with their advertising earnings and their sales of Silver until now. Once the public gets nervous they will all rush to the door to sell.

Suddenly all of those "monster" boxes of Silver coins will seem like a useless burden.

Gold is a completely different ball game. Most people who have Gold can afford to just sit on it and wait.

Anonymous said...

Just listened to BrotherJohnf "Fake Market" and he confirms my above point.
He needs to continually explain to his listeners about the state of the Silver market. He has to continually keep their confidence up by endless pep talks.

This is a true sign that his whole argument is based on sand. You can almost hear panic in his voice because he knows that if things don't improve they will leave him in droves.

Bullion Baron said...

The "public" is not yet in Silver duggo (IMO). How many people do you know IRL who hold some Silver? I guess we all move in different circles, but the only couple of people at my place of employment who have Silver are those who've purchased after I've talked to them about it...

When the retail market does move into precious metals Silver will benefit due to the perception that it is better value than Gold. And like you say it will dump harder when the bubble finally pops.

Anonymous said...

Dear Bullion Baron
When I talk about the "public" I mean the small minority of the public who have bought Silver, never-the-less, the public. Many of these came to the party when Silver was $50 and have been "under-water" since. The "public" who are itching to get out when the price reaches $50 again. As for:-
"Silver will benefit due to the perception that it is better value than Gold" These are once again the "public" who are into precious metals because of their wrong perception. Gold and Silver have the same monetary value. Silver is much more expensive to store and harder to lug-around than Gold. Gold though is more "precious" because banks and big players want it.
I hope I'm wrong but I have a gut feeling that if the Silver market doesn't turn soon their will be a panic amongst the Silver "public".

AdvocatusDiaboli said...

I guess you are too much blinded into some black&white thinking.
Your point is valid, on the other hand this applies to gold as well, looking at the huge selection of old(used) gold coins minted especially between the years 1997 until today, that you find on the shelves.
And please dont start this "but the giants...they pay 50K/Oz" crap. On the shelves for sale as well: Rothschild bullion bars.
I keep my gold as well as my silver, regardless where the price is predicted to go by whomever, I dont care. And probably when GSR goes above 100, or silver drops below $15, I'll get a truck load of those usefull white stones.
Greets, AD

Banks dont want gold, and how many "big players" do YOU know? Oh, okay, somebody told you so.

Biosci said...


Spot on, my friend. And just look a the impassioned responses! There is what is true, and there is what we believe to be true because we wish it were so. I think you and I have similar views on the silver market.


Bullion Baron said...

duggo, yes some of the public would have bought into the peak, buying their Silver ounce to take down JP Morgan (lol), but weak hands to create big volume and send the price a lot lower? I doubt it.

As I pointed out above, sentiment is already at extreme lows and managed money is short Silver big time, this hasn't been enough to push Silver below $26 (so far) so I highly doubt a few of the public with their tube of American eagles is going to do much. But believe what you like I guess.

Sentiment on a couple of stacking forums tends to reflect the Sentiment Trader chart I posted earlier in the comment, everyone has switched to downside targets (Silver going to $18-22) as tends to happen right near the bottom.

This Friday and the job numbers could be the decider on whether Silver & Gold hold above or dip below their lows for the correction ($26 / $1525). In my opinion they will hold above or any dip below will be very short term (measured in hours not days) to run on stops.

S Roche said...

fwiw I agree with BB, I have a target of $1500 give or take, despite what SocGen et al say...

I am focused on NFP Friday.

Am being pestered by that Procheimian character for an article but I found all the attention distracting, I prefer to trade in silence.

Interesting times.