Silver has pulled back to a 38% Fib, the SMA 50 and a lateral support shelf on the daily chart. Good work.
The weekly chart shows that area to be notable support from a longer-term perspective as well. But it also shows the model we used from 2016 as to what the first real short-term correction might look like. Silver has pulled back significantly from the highs but if things get really rough the next target would be around 16.20 just below the 62% Fib level. Of note, the daily SMA 200 above is rising toward that area.
As for HUI, it has dropped below the first short-term support level. Applying some Fibs here as well the 38% retrace appears to be next up with better looking support at around the 50% Fib (192), which corresponds with the first key support area we noted at 195. Next, again if things get real funky, would be the 62% Fib, 180 area support and a gap fill.
Weekly HUI shows the first support level from a longer-term perspective. That is what the index is currently working on… holding it or failing it. This is a process.
The bottom line is that while nothing is ever certain in the market, what is close to it is that we’d have a table pounding buy if we were to see HUI at 180 (or whatever the low ends up being) while the cyclical world enters a correction, as is the favored view for Q4. Meanwhile, the high risk CoT data for gold and silver have me leaning toward a deeper correction for the metals. This weekly is almost certainly addressing the CoT but won’t see the effects of the price damage in this week’s report, unfortunately. The CoT data are as of Tuesday while the metals were still in bounce mode.
More to come in NFTRH 570.
