Is Now The Opportune Time To Buy Silver?

| February 14, 2020

silverJust 9 short days ago your friendly Gold Enthusiast advised that he’s waiting for signs of an uptrend before buying into silver. Just exactly what that means might be up for debate; usually, an uptrend requires starting from a decent base with relatively low volume, and from there a rise in both price and volume.

Are we seeing that in the current chart for SLV?

silver

(Source: Fidelity.com)

The 6-month chart is both enlightening and confusing.  During Example 1, we see what looks like a promising little candlestick base occuring at the same time as a low RSI – but silver doesn’t really go anywhere, only up about 40 cents before the run dies out.

Example 2 is a little better from a price and RSI perspective – a gain of 1.40 as silver ran from an RSI down around 32 up to 70.  But volume didn’t give a good indication of going down before the run, then increasing during the run.

Things like indicators not working make it hard to anticipate, predict, or in general have confidence in trading.

Right now silver has gotten close to a recent low, and is up in premarket trading. Volume has been on a slow decline recently so that’s a positive sign. And silver bulls had been backing off on bullish bets…

…until this past week. Now we’re seeing signs that silver bulls are going after silver again. Your Gold Enthusiast thinks it might be a bit early yet — most investors are still chasing equities as the US market makes several new all-time highs.

So if we see a small rally and it fades out, don’t say we didn’t warn you.

Signed,

The Gold Enthusiast

(DISCLAIMER: The author holds no position in any mentioned security.  The author is long the silver sector via a small position in USLV. He may daytrade around this position but has no intention of trading out of this core positions in the next 48 hours)

Note: This article originally appeared at The Gold Enthusiast on February 13, 2020.

 

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Category: Commodities

About the Author ()

Mike Hammer has had a wide-ranging career, with trading and investing as a continuing theme. Mike graduated from UC Berkeley with a business degree, then worked with Macy's in their operations arm. He left Macy's and spent a summer trading his own account, which taught him a lot about trading in general and markets in particular. Trading through the Black Monday and the Crash of 1987 showed him how most people are unprepared for upheavals in their trading. He then joined Waddell & Reed as a financial advisor, helping regular people understand their finances and meet their life goals. Then came the usual story - Mike met and married the lady of his dreams. They moved to upstate New York, where Mike worked first for a small manufacturing consulting company, then Cornell University. While loving the work and the higher-education atmosphere, Mike missed the world of finance. Eventually, he signed up for stock trading coaching with the Adam Mesh Trading Group, to learn from people who understood modern markets. Within a year, Adam asked Mike to become a stock trading coach. Since then, Mike has trained over 200 individuals, spoke at several national conventions, and is a frequent contributor to conference calls across the Adam Mesh community. Mike writes The Gold Enthusiast daily newsletter, runs the Golden Hammer trading service, and participates in the Mesh Private Portfolio. He also keeps a position in international education which keep him in touch with "the student mindset". Mike closely follows the gold, energy, and financial sectors. His motto is "Plan your trade, then trade your plan!"

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