Thursday, October 15, 2015

Silver COT (Commitments of Traders) and Daily Charts

The green circles show the tops in silver prices and the red circles show the bottoms. The low bars on the COT hinted that bottoms were in play for late summer and after price collapsed during September. The positive divergence and oversold conditions shown on the candlestick chart forecasted a rally which occurred. The inverted H&S pattern (pink) shows the head at 14, neckline at 15.5, so upside target is 17 after price broke out above the neck line.

The blue upward-sloping channel is in play. Silver has spiked higher in recent days as the dollar drops. The COT bars continue to expand showing that a rally is in play, hoiwever , the COT bars are consistent where other tops in silver prices occurred. COT chart information lags. There is likely a near term top soon at hand.

The candlestick chart shows negative divergence (red lines) for the indicators but the MACD line is long and strong wanting another price high after a pull back occurs. Price will need to back kiss the 200-day MA at 15.97. Price has violated the upper standard deviation band so a move back to the middle band, the 20-day MA, at 15.27 and rising, is in play. 

If you missed the rally in silver the charts urge caution against trying to chase the upside now. Silver should receive a pull back in the near term and take a sideways rest but the weekly chart remains encouraging for more upside. Perhaps silver will stutter sideways at the 200-day MA before plotting another move higher. Silver may move sideways from here with an ongoing upward bias. Price likely needs a rest in the near term to follow the pattern shown by the circles. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note: COT chart is provided courtesy of Cot Price Charts which is an excellent site to find all the commodity COT charts. The chart is annotated by Keystone.

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