Catching the ride in silver

August 20, 2013 06:59 AM
Market Pulse for August 20

Last week September 2013 silver (COMEX:SIU13) opened at $20.680 per ounce and closed the week at $23.322. Bulls got some positive economic news out of China and the Eurozone helped push speculation on increasing silver demand.

And is big money lending a hand to silver bulls? I think so, in the Disaggregated COT this past week we had a solid bull move with Producers adding to net shorts no net short -32,304 contracts, Managed Money added to net longs now net long 11,462 contracts, and Swap Dealers, who will join Producers on the sell side of an up trending market, have been dropping net longs now at 12,028 contracts. And we see the solid close last week over the 20-period EMA. So will the bull continue this coming week? Good possibility but watch profit taking, there is a good chance we could see some of that this week. So watch carefully and hope you caught the ride in silver. 

If you need help understanding how to understand how to use the NEW COT report to your benefit get instant access to my new e-book "What Lies Beneath ALL Trends". It is filled with eye opening information.Commercial Net Tracker instructions: This form tracks the Commitment of Traders (COT) data for the commodity futures market. This form "looks" at the most recent five weeks of COT data and provides visual indications of the data. A) If the current value is at a 12-month low, the cell will display a red/burgundy background. B) If the current value is at a 12-month high, the cell will display a green background. C) If the current value went from net negative to net positive, the cell will display a blue background (indicating a bullish condition). D) If the current value is both a 12-month high and also went from a net negative to a net positive, the background will be green. You should view the data with green backgrounds to determine if they also went from net negative to net positive.

Proceed to Page 2 for this week's detailed fundementals...


You can see on the daily chart below the previous tight range of 19-20 as silver reflected a weak trending market. Currently you can see with ADX at 41 and DI Differential ay 29.52 this is a strong trending market. MACD is bullish adding divergence above the signal line and Stochastics are now in deep overbought territory. On the daily chart you can see my green technical trade set-up as DI Differential dropped below 5 and as DI+ crossed over DI-. MACD crossed up over the signal line and Stochastics started correcting from oversold territory.

Click to enlarge.

Now on the weekly chart you can see ADX is dropping showing the previous extremely strong trend is weakening. It looks as if the drop has slowed and DI+ is now over DI- reflecting a possible change to trend if ADX numbers start rising. Stochastics are now on the high end of mid-range.

Have a prosperous trading week.

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