SILVER / XAG - WILL WE SEE A CORRECTION AFTER ALL?
Updated
My analysis today deals with how the further course of our most popular precious metal "SILVER / XAG" could look.
> The technical analysis and selected indicators, confirm the thesis of an imminent correction.
= Why, that I explain after the introduction.
The DXY / USD has a non-negligible impact on GOLD / SILVER, as the whole economy depends on its behavior.
> Meanwhile, this seems to take run-up, for a final upswing, which could bring the precious metal under massive selling pressure.
> Regardless of these selling pressures coming from the USD, SILVER has been somewhat caught at a very strong resistance, which foreshadows a falling price.
In the following, the analysis goes into detail, so that the significant levels and areas are known to you.
For this purpose, I have performed a "MULTI-TIME-FRAME" analysis, which refers to the higher time units (month & week) and thus makes the big picture visible.
Normally all time units below "1h" are called noise, but even a - 1h-4h - analysis is of no use to you, if the knowledge about the big and whole is missing.
> We traders know that no one can predict the future and that is exactly why you have to be prepared for all initial situations.
> If the DXY should rise again, that means "BLOOD" for the traditional and crypto markets.
> This creates dangers, but also opportunities - it is important to look at the big picture.
> Which levels are RELEVANT, I have explained in detail in the following pages.
Table of contents
1st part = INTRODUCTION
2nd part = TECHNICAL ANALYSIS
= Monthly - Time frame
= Weekly - Time frame
3rd part = CONCLUSION
PART ONE
"INTRODUCTION"
After "XAG/USD" formed a top at USD 50 in April|2011, a strong sell-off has been unleashed thereafter.
> This sell-off extended 9-years to the market peak of the Corona crisis, where we formed our current existing low.
> After this significant low of 11.64 USD (level last seen in 2009), investor fear subsided and a massive 159% buy-in, to over 30 USD, happened.
> Since this very extreme upward movement, the price corrected a little to compensate for this extreme.
> In recent weeks, we have seen a very strong upward movement, which I believe is on the verge of a correction.
= We are at the upper resistance line of a downtrend channel, which has been respected by the price since the top was formed.
= The significant Fibonacci level of 0.618 (of the downward movement so far) was reached and tried to be broken twice without success.
= The "DAILY" - MACD + RSI - both show divergences, which further strengthens the correction thesis.
> Once you look at the DXY (USD index) at the higher time levels, the further sell-off in the Traditional Markets becomes even more likely.
(My DXY analysis is linked below this post, for confirmation purposes).
SECOND PART
TECHNICAL ANALYSIS
For the analysis of the higher time levels, I proceed according to the onion-skin principle.
> MONTH - level > WEEK - level > DAY - level
These are divided into
> SUMMARY > CHARTS
The charts are presented in logarithmic scaling, as the given information can be visually presented in a more harmonious way.
(This also refers to Fibonacci levels.)
1st MONTH – Time frame
SUMMARY
The trend channel shown in the chart, in turquoise, was formed since 1971 and has been able to maintain itself as a legitimate trend channel since then. Its mid-trend line showed reactions when confronted and was respected by the market.
> The price is in the area below the mid-trend line and had challenged it over the last few months.
The trend channel shown in the chart, purple, formed since September|2020 and directed the downward movement since then.
> The price is at the upper end of the channel and already shows weakness, which could end in a further sell-off in the channel.
The trend lines drawn in the chart, in gold, formed in the 70s and turned out to be extremely good resistance or support areas.
> The price bounced twice in the recent upward movement and is meanwhile moving towards the lower trendline.
If we go into more detail about the "SUPPLY & DEMAND" zones, you can look at two "DEMAND" + "SUPPLY" zones on the chart.
> The "DEMAND" zone 1, is WEAK = followed a weak movement.
> The "DEMAND" zone 2, is VERY STRONG = followed a strong movement + has not yet been tested by the price.
> The "SUPPLY" zone 1, is WEAK = followed a weak movement.
> The "SUPPLY" zone 2, is MEDIUM STRONG = followed a weak movement, but has already been tested twice.
The Fibonacci retracements should serve us as additional confirmation and have been taken into account in past movements (last decades).
> FIB 1 | will serve as resistance should the price attempt another run up.
> FIB 2 | are the possible targets, which would be feasible in case of a successful breakout.
> FIB 3 | are the final resistance areas, which stand before a new rally.
> FIB 4 | are the support areas, for a possible sell-off.
> FIB 5 | are the support areas, for a very strong unexpected sell-off.
Past highs and lows usually serve as resistance/support, one of which we have.
> ALL TIME HIGH | 2011
> HIGHER HIGH | 2021 - Bullish Market Structure = Beginning
> HIGHER LOW | 2022 - Bullish Market Structure = Confirmation
Some levels of interest are in front of us, which in the last months + years, played a strong role for the market.
> The most relevant at the moment - POI (24.25 USD) - represents an important mark already since the year 1980 and thus currently occupies a very strong resistance role.
> The other POIs are by no means negligible and will play a role in the price development in the coming days, weeks and months. (Therefore, take your time and transfer the ones that are relevant for you into your chart).
OVERVIEW
CURRENT RELEVANT
CHARTS
XAG - Overall picture without POIs + without FIBONACCI.
XAG - Overall picture without POIs
XAG - Overall picture without FIBONACCI
ATTENTION
In the following time levels, I will only deal with the NEW, added elements..
2nd WEEK – Time frame
SUMMARY
Besides the already mentioned trend channel + trend lines, more trend lines become visible.
- These have led to reactions in the chart in the past and should therefore be kept in mind.
The monthly "SUPPLY & DEMAND" zones are joined by others from the weekly view that coincide with other resistance / support elements.
> The "DEMAND" zone 1, is VERY STRONG = followed a Strong move + has not been tested by the price so far.
> The "DEMAND" zones 2+3, are MEDIUM STRONG = followed a strong move + combination with monthly demand zone.
> The "SUPPLY" zones 1+2+3, are WEAK = followed a Weak movement.
+ Zone 1 covered by weak monthly supply zone
+ Zone 2 has no cover by monthly supply zone
+ Zone 3 is already too old to be a relevant zone. Nevertheless, keep in mind for possible intraday price action.
> The "SUPPLY" zones 4+5, are VERY STRONG = followed a very strong move + they defend the past "all-time-high".
As further Fibonacci additions we have two more elements:
> Both newly drawn elements refer to a possible downward movement.
CHARTS
XAG - Overall picture
XAG - Overall picture without FIBONACCI
THIRD PART
CONCLUSION
"Silver: The gold of the little man "
Why this saying could change in the next years / decades, you will learn in a future post from me.
> Invest in physical silver (via investment coins = for example - Maple Leaf) that could change your life in the future and belongs in any portfolio.
In summary, based on technical analysis, there are strong reasons for SILVER price to fall.
> Since the price top in Jan|2021 - the monthly candles were dominated by bearish.
> A possible breakout of resistance elements is not impossible, but highly unlikely.
> The divergences in the daily RSI + MACD, suggest a bearish sell-off.
For this reason, I assume a weak SILVER exchange rate and a strong USD and an accompanying bloodbath in the traditional and crypto markets.
> Positioning after confirmation of this thesis = SHORT.
If this idea and explanation has added value to you, I would be very happy to receive an evaluation of the idea.
Thank you and happy trading!
ZIEL IST DIE AUTARKIE | THE GOAL IS SELF-SUFFICIENCY
> The technical analysis and selected indicators, confirm the thesis of an imminent correction.
= Why, that I explain after the introduction.
The DXY / USD has a non-negligible impact on GOLD / SILVER, as the whole economy depends on its behavior.
> Meanwhile, this seems to take run-up, for a final upswing, which could bring the precious metal under massive selling pressure.
> Regardless of these selling pressures coming from the USD, SILVER has been somewhat caught at a very strong resistance, which foreshadows a falling price.
In the following, the analysis goes into detail, so that the significant levels and areas are known to you.
For this purpose, I have performed a "MULTI-TIME-FRAME" analysis, which refers to the higher time units (month & week) and thus makes the big picture visible.
Normally all time units below "1h" are called noise, but even a - 1h-4h - analysis is of no use to you, if the knowledge about the big and whole is missing.
> We traders know that no one can predict the future and that is exactly why you have to be prepared for all initial situations.
> If the DXY should rise again, that means "BLOOD" for the traditional and crypto markets.
> This creates dangers, but also opportunities - it is important to look at the big picture.
> Which levels are RELEVANT, I have explained in detail in the following pages.
Table of contents
1st part = INTRODUCTION
2nd part = TECHNICAL ANALYSIS
= Monthly - Time frame
= Weekly - Time frame
3rd part = CONCLUSION
PART ONE
"INTRODUCTION"
After "XAG/USD" formed a top at USD 50 in April|2011, a strong sell-off has been unleashed thereafter.
> This sell-off extended 9-years to the market peak of the Corona crisis, where we formed our current existing low.
> After this significant low of 11.64 USD (level last seen in 2009), investor fear subsided and a massive 159% buy-in, to over 30 USD, happened.
> Since this very extreme upward movement, the price corrected a little to compensate for this extreme.
> In recent weeks, we have seen a very strong upward movement, which I believe is on the verge of a correction.
= We are at the upper resistance line of a downtrend channel, which has been respected by the price since the top was formed.
= The significant Fibonacci level of 0.618 (of the downward movement so far) was reached and tried to be broken twice without success.
= The "DAILY" - MACD + RSI - both show divergences, which further strengthens the correction thesis.
> Once you look at the DXY (USD index) at the higher time levels, the further sell-off in the Traditional Markets becomes even more likely.
(My DXY analysis is linked below this post, for confirmation purposes).
SECOND PART
TECHNICAL ANALYSIS
For the analysis of the higher time levels, I proceed according to the onion-skin principle.
> MONTH - level > WEEK - level > DAY - level
These are divided into
> SUMMARY > CHARTS
The charts are presented in logarithmic scaling, as the given information can be visually presented in a more harmonious way.
(This also refers to Fibonacci levels.)
1st MONTH – Time frame
SUMMARY
The trend channel shown in the chart, in turquoise, was formed since 1971 and has been able to maintain itself as a legitimate trend channel since then. Its mid-trend line showed reactions when confronted and was respected by the market.
> The price is in the area below the mid-trend line and had challenged it over the last few months.
The trend channel shown in the chart, purple, formed since September|2020 and directed the downward movement since then.
> The price is at the upper end of the channel and already shows weakness, which could end in a further sell-off in the channel.
The trend lines drawn in the chart, in gold, formed in the 70s and turned out to be extremely good resistance or support areas.
> The price bounced twice in the recent upward movement and is meanwhile moving towards the lower trendline.
If we go into more detail about the "SUPPLY & DEMAND" zones, you can look at two "DEMAND" + "SUPPLY" zones on the chart.
> The "DEMAND" zone 1, is WEAK = followed a weak movement.
> The "DEMAND" zone 2, is VERY STRONG = followed a strong movement + has not yet been tested by the price.
> The "SUPPLY" zone 1, is WEAK = followed a weak movement.
> The "SUPPLY" zone 2, is MEDIUM STRONG = followed a weak movement, but has already been tested twice.
The Fibonacci retracements should serve us as additional confirmation and have been taken into account in past movements (last decades).
> FIB 1 | will serve as resistance should the price attempt another run up.
> FIB 2 | are the possible targets, which would be feasible in case of a successful breakout.
> FIB 3 | are the final resistance areas, which stand before a new rally.
> FIB 4 | are the support areas, for a possible sell-off.
> FIB 5 | are the support areas, for a very strong unexpected sell-off.
Past highs and lows usually serve as resistance/support, one of which we have.
> ALL TIME HIGH | 2011
> HIGHER HIGH | 2021 - Bullish Market Structure = Beginning
> HIGHER LOW | 2022 - Bullish Market Structure = Confirmation
Some levels of interest are in front of us, which in the last months + years, played a strong role for the market.
> The most relevant at the moment - POI (24.25 USD) - represents an important mark already since the year 1980 and thus currently occupies a very strong resistance role.
> The other POIs are by no means negligible and will play a role in the price development in the coming days, weeks and months. (Therefore, take your time and transfer the ones that are relevant for you into your chart).
OVERVIEW
CURRENT RELEVANT
CHARTS
XAG - Overall picture without POIs + without FIBONACCI.
XAG - Overall picture without POIs
XAG - Overall picture without FIBONACCI
ATTENTION
In the following time levels, I will only deal with the NEW, added elements..
2nd WEEK – Time frame
SUMMARY
Besides the already mentioned trend channel + trend lines, more trend lines become visible.
- These have led to reactions in the chart in the past and should therefore be kept in mind.
The monthly "SUPPLY & DEMAND" zones are joined by others from the weekly view that coincide with other resistance / support elements.
> The "DEMAND" zone 1, is VERY STRONG = followed a Strong move + has not been tested by the price so far.
> The "DEMAND" zones 2+3, are MEDIUM STRONG = followed a strong move + combination with monthly demand zone.
> The "SUPPLY" zones 1+2+3, are WEAK = followed a Weak movement.
+ Zone 1 covered by weak monthly supply zone
+ Zone 2 has no cover by monthly supply zone
+ Zone 3 is already too old to be a relevant zone. Nevertheless, keep in mind for possible intraday price action.
> The "SUPPLY" zones 4+5, are VERY STRONG = followed a very strong move + they defend the past "all-time-high".
As further Fibonacci additions we have two more elements:
> Both newly drawn elements refer to a possible downward movement.
CHARTS
XAG - Overall picture
XAG - Overall picture without FIBONACCI
THIRD PART
CONCLUSION
"Silver: The gold of the little man "
Why this saying could change in the next years / decades, you will learn in a future post from me.
> Invest in physical silver (via investment coins = for example - Maple Leaf) that could change your life in the future and belongs in any portfolio.
In summary, based on technical analysis, there are strong reasons for SILVER price to fall.
> Since the price top in Jan|2021 - the monthly candles were dominated by bearish.
> A possible breakout of resistance elements is not impossible, but highly unlikely.
> The divergences in the daily RSI + MACD, suggest a bearish sell-off.
For this reason, I assume a weak SILVER exchange rate and a strong USD and an accompanying bloodbath in the traditional and crypto markets.
> Positioning after confirmation of this thesis = SHORT.
If this idea and explanation has added value to you, I would be very happy to receive an evaluation of the idea.
Thank you and happy trading!
ZIEL IST DIE AUTARKIE | THE GOAL IS SELF-SUFFICIENCY
Note
After in April - XAU/USD - made attempt to break out, this unfortunately remained with an attempt.Lack of momentum and the current uncertainty took influence in the retest of the broken resistance and let this fail. (VK - Divergence - Chart)
Despite this, silver is not lost yet, and we should reassess the situation after the existing correction.
> The re-evaluation should be done after reaching the 0.618 FIB, or rather the "GOLDEN BOX" drawn by me.
1 DAY - TF | OVERVIEW
1 DAY - TF | SCENARIOS
1 DAY - TF | VK - DIVERGENCE - TOP
1 WEEK - TF | OVERVIEW
Note
The idea is hereby closed, and a current one will be uploaded soon.
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