NFTRH 705 on Silver

NFTRH 705 excerpt (May 15) on silver (as silver futures tick 21.92, just below the key resistance zone beginning at 22)

Watch Silver

The broad markets finally took a sentiment bounce; or was it just a one day short covering rally?

I wrote an extended article on Friday so we don’t have to get too gritty into details that have yet to emerge. Upside bounce objectives for US (SPX) and global (ACWX) stocks were covered along with the status of bonds (last week’s featured content in this space) during a week with yet another inflationary headline (CPI).

The article also covers the US dollar (either breaking through long-term resistance or preparing to whipsaw back below it). Along with the US dollar rides the Gold/Silver ratio. These two ‘anti-liquidity’ items will determine the fate of many global markets, but especially commodities and given the large inflationist contingent in the gold sector, probably the precious metals as well.

In other words, during its poor seasonal period but with its now contrary bullish CoT alignment, silver should probably lead gold, weakening the Gold/Silver ratio quite possibly in tandem with a weakening US dollar. That would be thematic of a widespread relief rally in broad asset markets.

silver commitments of traders
CoTbase.com (w/ GT mark-ups)

Silver had come to a low risk CoT situation even before the breakdown below support (now resistance). Now the CoT is likely even better. But let’s also realize that CoT is not usually a good timer. It is a risk vs. reward indicator and it is now positive.

A rising Silver/Gold ratio would be a signal that the broad rallies can continue. But let’s also realize that despite some initial signals, the GSR and USD are still bullish with neither having aborted the sharp uptrends that began in April. So let’s tap the breaks and realize what could be, but also what currently is.

As for the large contingent of subscribers who are precious metals focused, we updated gold, which dropped through the preferred support target (what else is new?) but is intact, and silver. As a side note, the miners diverged gold as the HUI/Gold ratio held the Q4 2021/Q1 2022 lows and put in a green day on Friday, as did silver. These are initial hints, and could be undone on Monday. But then again, relief would need to start somewhere and it’s been a bludgeoning of the macro markets since my ill-timed flight to Key West. >>insert mad face emoji here<<

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6 thoughts on “NFTRH 705 on Silver

  1. “Upside bounce objectives for US (SPX) ….”

    Jeeze, now not one but *two* upside gaps in SPY since last Friday that, one way or another, will (?) be filled.

    MMs sure don’t make it easy to get something going.

    1. Agree, it’s not easy. But the gaps don’t need to fill promptly, so it’s even less easy. Bounce, failure, gap fills? Sure, but the process could be measured in many weeks or even in months.

      1. Healthy! QQQ $2 bucks away from filling this A.M.’s gap.
        Maybe SPY does the same.
        All good.

      2. Would love to see DVAX’s gaps fill, too, sooner rather than later.
        How about DVAX’s 28% “gap and run” last Friday? Wow, er, crazy.

      3. Funny, I was just looking at DVAX. I think it got popped on being added to an index. I’ll wait for it to settle down from that frenzy.

      4. Right you are, sir. DVAX added to the S&P SmallCap 600 today, May 17.

        At the same time, on May 16, Motley Fool reaffirmed DVAX as a “covid vaccine” stock, which is unfortunate (to me).

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