I've had a lot of requests for updates on both, each are my least favorite assets to analyze, mostly because of the unpredictable nature of each, especially when it come to the COMEX. However, here is where we are at this point. The GLD charts were captured first and then SLV, so you will see a little bit of a decline taking hold intraday, that will be obvious from the SLV charts as compared to the first GLD charts.
On a side note, listening to Bernanke in the background as he testifies before Congress, he made a statement about the NFP that in his view, it is "understating unemployment". This is one of those good is bad/bad is good as that statement could be taken by some bulls that QE3 is not off the table. Just a little side note.
GLD since the last update (daily chart), that odd non-consolidation pattern did break. Applying Swing rules, the white candle was the pivot, the red candle was a break of the swing uptrend and today's candle represents noise, in a Swing context, GLD would be a short swing trade with today representing noise.
Intraday, GLD like the market, has appreciated with the Euro/weaker $USD this morning, obviously on the news out of Greece regarding a final draft between the Troika representatives and Papademos.
There was some initial accumulation in GLD , it is not clear that the move up is being confirmed, it did see confirmation early this morning, but that has faded.
The same is true of the next timeframe at 2 min.
As well as the 5 min chart...
The hourly is the worst looking as this particular cycle has gone from confirmation to distribution, you could think of this as the 4 stages and we'd be somewhere in transition between stages 3 and 4 (distribution/top and decline).
Even though the trend line has been broken, as I pointed out in the last GLD update, my preference would be to see the Trend Channel broken to the downside before considering this to be a high probability stage 4 move. This of course would go a long way in helping us understand whether GLD has reached a bubble, whether that be a very dangerous primary trend bubble or a large pull back in an intermediate trend. My custom indicator at the bottom "Close within the range" (think candlesticks), grew well during the uptrend as it should have, it has since declined as I would also expect on a break of the trendline that we recently saw.
As for SLV, the last time I updated, I said I believe that there may be a line in the sand around $34, it is likely that this has a lot to do with JPM's short on silver, we are in that area and there is significant overhead resistance in the area, There is a short term trend line that is on the verge of being broken, similar to GLD.
Again, intraday, the Euro has supported commodities broadly this morning and GLD/SLV specifically as you can see the very close correlation (Euro in red), RSI has gone negative in this morning's trend and as you can see, as this capture is a bit later then the GLD captures, a slight fall off in the Euro is effecting both GLD and SLV.
Intraday we see early a.m. accumulation and we are close to in line right now, with a slightly negative stance in 3C-intrady.
On a 5 min chart, it does look like SLV has hit an area of resistance and appears that the next trend is being set up for a decline or stage 4, which is very similar to GLD's position.
Longer term, the 15 min chart is confirming the 5 min chart and in the same area.
The 30 min chart also is confirming what the previous two charts show.
Once again, the Trend Channel is what I would pay the most attention to as far as defining a stage 4 decline. Longer term, I don't feel SLV has as much of question mark regarding a top, SLV has been manipulated severely by the COMEX, at one point SLV was looking as if it may enter a bubble like area, but the COMEX (and in my opinion, to protect JPM as a favor via the F_E_D) hiked margin rates 5 times in a row in something like 6 day and absolutely stopped SLV in its tracks, this was not the kind of volatility margin increase that is normal, especially when they kept hiking it after they had already killed the upside momentum. That being the case and SLV/silver probably not being in a bubble, makes SLV less attractive to me for any trades either long or short.
Speaking of which...
Here is the chart when the Silver vigilantes (remember there was a viral web campaign to break JPM's short) finally pushed SLV through resistance that Blythe Masters has managed to maintain, the resulting move was very parabolic so a margin hike did make sense, but 5 consecutive hikes was clearly something other then dealing with volatility, it was like kicking a man who was already dead and perhaps was a message. SLV lost nearly 30% in 5 days!
Longer term it is hard to look at this chart and argue that SLV is in anything other then a primary downtrend right now.
No comments:
Post a Comment