The Reason Why Silver Is In ‘No Mans Land’

| February 28, 2019

Image by Unsplash

Today marks a moment in history for your friendly Gold Enthusiast. Due to increasing requests, we’re starting coverage of the world of silver as well as gold.  Because we want to make this as easy for you as possible we’ll be covering gold Monday – Wednesday – Friday, and silver Tuesday – Thursday.  So if you’re only interested in one or the other you’ll know when to watch!

Let’s get right into it.  Any time you start following a new market sector you should first get a handle on where it is right now, compared to recent history.  Being fundamental followers and technical traders, this is usually much easier than you might think.  The place to start is also where everything ends, which is the price.  So let’s look at the 1-year chart for the unleveraged ETF SLV and see what it says about the US silver market.

SLV Chart

Well, that’s about the easiest opening pitch we’ve seen for a while.  Silver is just about bang-splat in the middle of its yearly range (as they say across the Pond).  Yearly high is 16.35 and low is 13.11, so 14.90 is literally just a few cents off the middle of the range.

The current pattern is higher-highs and higher-lows, indicating an uptrend.  Right now SLV is in the middle of the range defined by the most recent high and the most recent low, so it’s in no-man’s land.  Meaning there’s not a good risk-reward trade at the moment – a rational trader would wait until it either dropped to 14.60 or rose to 15.20 to evaluate conditions for a long or short trade.

Perhaps most tellingly, SLV recently formed a golden cross – the 50-day simple moving average crossed up through the 200-day moving average, and SLV is above its 200 day SMA.  This tells long-term investors and traders that a bull market might be in progress in the sector.

So there we have it – a possible bull market and a trade possibly coming soon.  We’re thinking the next thing to do is go look for sector-leading stocks… What do you think?  Let us know in the Comments below.

Happy trading,

The Gold Enthusiast

DISCLAIMER: The author holds no position in any security mentioned in this article, and has no plans to enter a trade in the next 48 hours.

Note: This article originally appeared at The Gold Enthusiast on February 26, 2019.


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Category: Silver

About the Author ()

Mike Hammer has had a wide-ranging career, with trading and investing as a continuing theme. Mike graduated from UC Berkeley with a business degree, then worked with Macy's in their operations arm. He left Macy's and spent a summer trading his own account, which taught him a lot about trading in general and markets in particular. Trading through the Black Monday and the Crash of 1987 showed him how most people are unprepared for upheavals in their trading. He then joined Waddell & Reed as a financial advisor, helping regular people understand their finances and meet their life goals. Then came the usual story - Mike met and married the lady of his dreams. They moved to upstate New York, where Mike worked first for a small manufacturing consulting company, then Cornell University. While loving the work and the higher-education atmosphere, Mike missed the world of finance. Eventually, he signed up for stock trading coaching with the Adam Mesh Trading Group, to learn from people who understood modern markets. Within a year, Adam asked Mike to become a stock trading coach. Since then, Mike has trained over 200 individuals, spoke at several national conventions, and is a frequent contributor to conference calls across the Adam Mesh community. Mike writes The Gold Enthusiast daily newsletter, runs the Golden Hammer trading service, and participates in the Mesh Private Portfolio. He also keeps a position in international education which keep him in touch with "the student mindset". Mike closely follows the gold, energy, and financial sectors. His motto is "Plan your trade, then trade your plan!"