Gold and Silver – 1 Sep

Gold closed slightly up, but is still working downward to the 18 day moving average. RSI and stochastic are not saying anything other than we are dead neutral. The chart is starting to take on classic head and shoulders characteristics with the second shoulder formed by the recent swing high at 1845. Volume is lower on the second shoulder than the first. If this chart pattern confirms, then the projection is all the way down to 1525. A higher swing low than 1705 will help shake off the bad feelings associated with a potential head and shoulders reversal by establishing a basis for a new up trend. Then if 1845  falls and that level is breached, we can flush the idea of a head and shoulders outcome. The Evil Empire will be gunning hard to make the chart look negative. I expect a raid on gold any minute.

Resistance is 1845 and support is the 18 day moving average at 1792 followed by the Fibonacci 38.2% retrace at 1749, and finally the last swing low and the Fibonacci 50% retrace near 1705.

PHYS has a slightly different chart in that a short term up trend currently exists with a higher high and a higher low. As long as the swing low at 15.50 holds support, then the chart remains bullish. However, the same head and shoulder reversal pattern looms large and a new high above 16.10 goes a long way to dispelling that possibility. Resistance is 16.10 and support is the 18 day moving average at 15.58.

Silver is going sideways and volatility has gone somewhere else for the time being. Don’t get complacent, silver will light your hair on fire at the drop of a hat. One could argue that a substantial base has been built between 38.50 and 42. This base could be a platform for a move back toward 50. The trend is up with a series of higher highs and higher lows, and price is above the 18 day moving average. This setup is favorable for bullish trades. Resistance is the last swing high at 42.10 with support at the last swing low of 40.50. I have a Jan 45 Call position with SLV with a stop just below 40.50. If that swing low falls, then the up trend is nullified and I will punt.

 

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This entry was posted in Gold, Matrix Sentry TA, PHYS, Silver. Bookmark the permalink.

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