Monday, June 17, 2013

Silver - entry point (the same as gold)

While still in a correction mode, silver seems to generate a strong buy signal.


Bollinger bands, which are below the silver price chart, are the statistical measures - they have nothing to do with the fundamentals of silver. But they show the extreme behaviour of prices, both on buy side and sell side. In case of the red circles we have the buy signals indicated - since 1993 there have been only four such signals so that measure seems to generate long term buy signals.

Another chart below shows the behaviour of big silver speculators.

                                                            source: Proste Dywagacje

As you can see, presently the speculators are the less interested in silver since 2006 - their net position in silver contracts is nearly neutral (neither long nor short). This means rather very pessimistic view on silver prices which is another sign of capitulation of bulls in that market.
And capitulation of bulls is, from contrarian point of view,  a strong buy signal.

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