Silver commentary and Technical analysis – Part 1

Video transcript

Hello folks. We are focused on Silver today.

 

Spot Silver Technical analysis – weekly time frame

The first chart we have in front of us is the weekly time frame for Silver spot price and you'll notice the pink slanted Trend line there.

That is a long-term Support and resistance line that, for whatever reason, the price action in Silver is choosing to find Support and resistance at that level.

And so we don't know why that particular level is acting that way.

We just draw it on the chart and use it to our advantage when we are doing Technical analysis.

There are a number of facets or aspects of a financial chart that we can look at.

I always focus on the Price action trading first.

Market structure analysis is how some people refer to it.

 

Support and resistance levels

Support and resistance levels are key to that.

And, and that's exactly what we're seeing here.

(01:30):

This pink dashed-line that is a long-term Support and resistance level and, another key point to understand: Support and resistance levels don't have to be horizontal.

That's what we're seeing here.

This is a slanted Trend line, if you want to call it a trend line, and it is acting as the Support and resistance level.

So we can see that from back in the Bull market that peaked in 2011, that level was very briefly a resistance level on the way up.

Price pushed through the level, came back and tested it, then shot off towards the moon - didn't quite make it to the moon - came back and found support on the level multiple times.

And then here in 2013 broke through that support level.

(02:44):

See at this point, resistance becomes support.

Now support fails at this point and so price plunges through what used to be a support level - plunges, then in a Bear market rally comes back up to test what used to be support.

Well, you know, what used to be support is now resistance and that's exactly what we're seeing here.

In August of 2013, the Silver spot price came back up to the long-term Support and resistance line, tested it from below, found resistance and then petered-off down to the floor.

And so we can see that from a horizontal support level, prices found support down around $13.70.

(03:59):

You know, the exceptional circumstances here, the big scary plunge, however you want to look at that - we're not going to worry about that.

Violating what in my opinion is a long-term support level doesn't count in this case.

So let's list the factors that we want to consider again: specifically market structure analysis and Andrews pitchfork tool.

 

Market structure analysis - Andrews pitchfork tool

To draw an Andrews pitchfork here, let’s turn on magnet charting mode, and I'd probably do that if I was going to go for consistency.

If you look at multiple videos that I publish, you'll see that I believe the current Bull market action started around may of 2019.

And so I'm choosing between these two lows as starting points for my Andrew's pitchfork, I'm choosing the low in May of 2019, because that's when I think the latest Bull action began.

(05:52):

And so here we are looking at the big picture Silver spot price chart in the weekly time frame.

There's our market structure now.

We've got our Andrews pitchfork now.

Let's zoom in a little bit and look at this Pitchfork. It hasn't been tested so at this point we can't put a whole lot of confidence into this fork, but it is interesting that price is right up here playing with the median line.

The price of Silver is also playing with the long-term resistance level. Anyway, that Pitchfork is interesting.

The new information that we've acquired by drawing that Andrews pitchfork is that it's just another indication that price is dealing with resistance.

If you are wondering why Silver is not moving up right now, it’s because it's got multiple resistance levels that it's dealing with.

 

Technical analysis tools for Silver chart

(07:11):

Let's throw a couple of Technical analysis tools onto this spot Silver chart.

I like the 10-period and 40-period Moving average on a weekly chart.

MACD is a standard Technical indicator so let's do that.

In MACD both the signal and the indicator are down below our zero level. And so from a bullish - bearish indication, MACD is in bear mode.

On a positive note, it looks like MACD is trying to give us a buy signal, and the Trading signal will be given from a very oversold level.

This would be a good level to start a rally from.

The big scary plunge is really throwing the Moving averages out-of-whack. So let’s not focus on Moving averages.

 

Summary of spot Silver Technical analysis

  • Silver spot price is running into resistance at a long-term slanted Support and resistance zone
  • Andrews pitchfork tool shows Silver spot price running into resistance at the fork’s median line
  • MACD very oversold, working towards a buy signal

 

Continued in part 2…