ChartBrief 68 – A New Bull Market In Silver?

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Probably a lot of people look at the longer term chart of silver and the first thing they see is the massive bull market that peaked in 2011, rising over 400% off the 2008 bottom and almost 10x off the early 2000’s bottom.  It’s tempting when you see something like that to dream… “what if?”

Back to reality, the charts of silver are looking more and more interesting, and we may even be on the cusp of a new bull market.

The chart that sticks out to me is that of speculative futures positioning from the latest Macro Technicals Report.

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Looking at the grey line (or is it silver?) the eye ball test says it looks like there’s an underlying longer term uptrend (connect the lows in 05, 08,16), but more interesting perhaps is the absolute frenzy in speculative futures positioning in silver.  In a ranging market you want to fade extremes in speculative positioning, but notice how speculative positioning remains stretched to the long side around the early phases of the previous big bull market.

On a more short-term basis, as I noted in the report, silver has broken up through its 200-day moving average (that’s strike 1), and is close to breaking through a sort of minor resistance point at $18.5 (strike 2), which if successful will put major resistance of $19 in sight (strike 3).  On a pure technicals basis you build bullish conviction on each of these 3 strikes, particularly given the momentum seen in futures positioning and the apparent longer term underlying uptrend line.

This article appeared here first as a submission: https://www.seeitmarket.com/is-silver-on-the-cusp-of-a-new-bull-market-16745/

Article by Top Down Charts

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Topdown Charts: "chart driven macro insights" Based in Queenstown, New Zealand, Topdown Charts brings you independent research and analysis on global macro themes and trends. Topdown Charts covers multiple economies, markets, and asset classes with a distinct chart-driven focus. We are not bound by technical or fundamental dogma, and instead look to leverage any relevant factor to capture the theme. As such, here you will find some posts that are purely technical strategy, some that just cover economics and data, and some posts that use multiple inputs to tell the story and identify the opportunities. Callum Thomas Head of Research Callum is the founder of Topdown Charts. He previously worked in investment strategy and asset allocation at AMP Capital in the Multi-Asset division. Callum has a passion for global macro investing and has developed strong research and analytical expertise across economies and asset classes. Callum's approach is to utilise a blend of factors to inform the macro view.