Categories: Energy / General Market Commentary / Precious Metals
Topics: General Energy / General Market Commentary / General Precious Metals

Sprott's Thoughts: Taking a Look at Silver

There was a nice trade in silver off the December lows into the end-of-February peak.  Even if longs held through the correction in early March, the rebound move back to the February high took only two weeks.  As of close on Friday, April 7, 2017, the picture changed, and it might be worth taking a close look at what some of the potential implications are for silver. 

As the chart below shows, courtesy of Stockcharts.com, SLV, the silver ETF, put in a large, bearish reversal candle Friday.  After attempting to break out on the Syrian bombing and the less-than-expected NFP data[1], SLV reversed lower and closed below its 200 day simple moving average: 

Zooming in on the daily SLV chart to look at the past 30 days exposes the outsized reversal day on Friday, April 7, 2017, that encapsulated the prior 9 trading days.  A failed bullish upside breakout, only to reverse and close lower, sends signals I can’t ignore.

The chart below shows that SLV sentiment is hitting “Excessive Optimism” levels.  Optix is a proprietary measure of investor sentiment and is usually a contrary indicator.  When investors, as a group, are leaning too far in one direction, either bullish or bearish, one must take care of not getting caught by a counter move in the opposite direction:

To see charts and continue reading please click link http://secure.campaigner.com/csb/Public/show/fo15d--c49g2-5l3nhbo6