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SILVER PRICE UPDATE: Key Technical Levels While The Underlying Fundamentals Improve

I got a good laugh from Sven Henrich (northmantrader.com) response in his article Control:

Don’t call it QE they say, but ignore the fact that they are running a program equal in size to the annual US military budget. At $60B that’s exactly what it is.  Massive

Fed Chair Jay Powell: The economy is in a good place. Now here’s a $60B per month Treasury bill buying program, multiple rate cuts and daily repo operations. How stupid do they think we are?

If the U.S. economy is in such a GOOD PLACE, then why does the Federal Reserve need to buy $60 billion a month in U.S. Treasuries? And, as the Northman trader stated, the Fed Treasury purchases are equal in size to the U.S. military spending.  According to U.S. Government 2020 fiscal budget, the Department of Defense will spend $718 billion this year.  Thus, $60 billion multiplied by 12 months is $720 billion.

There is no coincidence that silver stopped right at the upper part of the triangle formation for the past four days. When stocks and commodities trade in this pattern, if it breaks above that diagonal line, it would be bullish short term.  However, the gold and silver prices have opened lower in U.S. markets this morning.  So, it doesn’t look like it will break above that upper triangle trend line, but we don’t know what tomorrow will bring.

From Feb 26th to May 28th, the silver price only fell about $1.50.  If the same trend takes place, then the silver price would fall right to the critical 50 Month Moving Average shown below at $16.39:

As I have stated several times in articles and video updates, the IMPORTANT KEY LEVEL was the 50 Month Moving Average which silver has been below since 2013.  When it finally broke above it in a big way in September, it’s not uncommon for a stock or commodity to retrace that key resistance, now turned support level before moving higher. Thus, if silver corrects back down to that $16.39 level, the commercial short positions will likely be close to a net-zero.

  1. Stocks, bonds, real estate, commodities, and precious metals are trading via technical analysis within a highly manipulated financial system.  As stated above, by the Fed buying $60 billion a month of U.S. Treasuries, the same as the monthly military spending, should give an idea of how much the central banks are propping up the markets.  So, stocks, bonds, real estate, commodities, and precious metals will continue to trade within that manipulated system until the Fed, and central banks lose control.
  2. When the Fed and central banks lose control of the financial system, and they will, then technical analysis will no longer be a good indicator of the market price. Instead, the surging demand for the precious metals by investors looking to protect their wealth will finally be trading in a free market that will likely go hog-wild.

So, once again.  If you want to leave comments on how useless technical analysis is for silver in a rigged market, then stop looking at the daily silver prices. However, if you are going to look at the daily silver prices, then all I am doing is providing short-term analysis on HOW THE TRADERS LOOK AT SILVER.

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