SILVER TODAY – Long liquidation sell-off in progress at last; UTL holds for now

Short Term: Medium Term: Long Term: Resistances: R1 17.72 Bottom of flag R2 18.89 20 DMA R3 20.06 Sept 22 peak R4 20.13 Sept 6 peak R5 21.13 High so far R6 21.60 July ’14 peak Support: S1 18.95 SL S2 18.89 20 DMA S3 18.39 August low S4 18.00 May peak S5 17.72 Bottom of flag S6 17.21 UTL S7 17.11 Low so far S8 16.14 March peak S9 15.82 May low S10 13.64 Dec low Stochastics:Bearish Legend: DMA = Daily moving average RL = resistance line UTL = uptrend line H&S = head-and-shoulder pattern Fibo = Fibonacci replacement line Technical Comment Analysis Silver prices broke below the SL and the bottom of the flag and have since seen follow-through selling that has taken prices down to the UTL. The stochastics are still falling so selling pressure is present but underlying tails suggest dip-buying may be emerging. We would expect support to be fairly strong around the UTL. Other factors As with gold, silver prices have struggled to make headway on the upside. The market consolidated for a long time but it is not surprising that the lack of upside progress has led to stale long liquidation. We wait to see the extent in this evening’s CFTC report, which will show the fund position as of the close on Tuesday, October 4, when prices fell to $17.72 per ounce.  We said earlier in the week that, with the dollar index looking stronger and some optimism building on better economic data, safe-haven demand may ease, which could lead to fund long liquidation – this seems to have unfolded now. For gold, there are multiple reasons for being bullish that we think will remain in place – potential repercussions from the Brexit, global debt, negative interest rates, the fiat-ness of currencies, record highs in equities and, more recently, banks in Europe are in the spotlight again.  Silver ETF holdings remain near recent highs despite the sell-off so we feel investors will see this as a buying opportunity. Conclusion We remain bullish on the big picture for gold and therefore for silver. We were expecting a sell-off; we will now wait to see if the weaker prices stimulate pent-up physical demand and further investment buying.  All trades or trading strategies mentioned in the report are hypothetical, for illustration only and do not constitute trading recommendations.

The post SILVER TODAY – Long liquidation sell-off in progress at last; UTL holds for now appeared first on The Bullion Desk.

from The Bullion Desk http://ift.tt/2dEFgun
via IFTTT