Silver Giving Way?

It is my only short position now, having taken losses on a couple market shorts (partially hedging longs) and a gain on crude oil (just because I was straight out bearish on oil).  But silver told me to keep holding short (I increased the short last week) and so far that is working out.

SLV is ticking a lower low to the one from a couple of weeks ago and is not yet oversold, with RSI going red (below 50).

slv

What’s more, the latest Commitments of Traders data were extremely bearish.  This is not a timer, but it is a condition to negative price events.

The rest of the post is excerpted from NFTRH 444…

On to the grizzly chart of the silver Commitments of Traders. Before getting to it, let’s note that gold’s CoT, while moving in a direction of higher Large Speculative net longs and higher Commercial net shorts (like silver), is nowhere near as extreme.

Here are some facts: We have shown on several occasions that there was extreme net Commercial shorting of silver at the beginning of the bull market that began early last decade. That is a potential mitigating factor, but on the shorter-terms these extremes represent risk of downside reactions. So dialing it in to a shorter time frame, the extremes that saw the onset of a harsh precious metals correction last summer have now been exceeded in both net Speculative and Commercial positioning, and in open interest.

silver cot

We noted last week that the little guy (blue) was not bullish on silver and that was a positive beneath the surface. Well, he lurched bullish last week and that is not good at all. Consider that positive now removed. Here is part of the chart from COTbase.com

silver cot

Subscribe to NFTRH Premium for your 40-55 page weekly report, interim updates and NFTRH+ chart and trade ideas or the free eLetter for an introduction to our work. Or simply keep up to date with plenty of public content at NFTRH.com and Biiwii.com. Also, you can follow via Twitter @BiiwiiNFTRH, StockTwits, RSS or sign up to receive posts directly by email (right sidebar).