Silver Market Update

By: Clive Maund | Mon, Aug 1, 2005
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Silver broke down from its long-term uptrend line and from its large symmetrical triangle pattern early in July, but the break was marginal and the important support at $6.80 held. Thus it remains in a sort of limbo, pending a decisive breakout that will signal the direction of the next significant move.

In this situation it is wise to presume that the larger trend remains up, at least while the aforementioned support at $6.80 holds, especially as the dollar advance appears to have run out of steam and a number of silver stocks have marked out exceptionally bullish long-term chart patterns, which is hardly what you would expect to see if silver was about to go into a significant decline. Some of these silver stocks have been highlighted on the site in recent weeks.

Silver and silver stocks should be accumulated on short-term weakness, in the expectation that the larger uptrend will reassert itself, and the current situation has the advantage that fairly tight stops can be employed to limit losses in the event that it breaks down.

The COT figures are encouraging, as the accompanying chart shows, being at the most bullish (or least bearish) for about a year. The open interest is still rather high, however, indicating that we may see some more weeks of floundering around before a decisive move occurs.


Clive Maund

Author: Clive Maund

Clive Maund,

The above represents the opinion and analysis of Mr. Maund, based on data available to him, at the time of writing. Mr. Maunds opinions are his own, and are not a recommendation or an offer to buy or sell securities. No responsibility can be accepted for losses that may result as a consequence of trading on the basis of this analysis.

Mr. Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications.

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