Mike “Mish” Shedlock's
Sitka Pacific Capital Management,Llc
For the first time in a long time, gold and silver miners are outperforming the metal, generally a good signal for both.
Starting November, on a daily chart, the XAU components started outperforming gold and silver.
Miners vs the Metals Weekly
A weekly chart shows these periods of overperformance and underperformance can last a long time. Recent action in the miners is encouraging as are the technical charts.
Gold Bull Flag
Retest of Resistance Line
Silver Bullish Divergence
The preceding two charts are from Ross Clark at Charts and Markets, via Bob Hoye at Institutional Advisors. The numbers pertain to DeMark exhaustion signals, a method I do not follow, but many technicians do.
Clark's Opinion
Silver loves to take out supporting lows, creating a Wyckoffian ‘Spring’ and bullish divergence in the RSI just prior to rallies. We have such a divergence now.
In the last thirty years silver has managed to put in seasonal lows in November and December (7 and 18 times respectively). Seasonal highs have been in January and February (14 and 10 times respectively).
There were only four instances where silver prices continued to rally past March (2016, 2011, 2006 and 2004). Rallies most commonly advance around 17%. The smallest percentage gain was 9% with a few outliers in excess of 30%. If the $16.56 low of last week holds then we can anticipate a minimum target of $18.05 with a most likely target of $19.35. An optimum transaction would be a March call option with a strike price halfway to the target. Options are available for the futures contract and the SLV ETF.
Thanks to Ross Clark and Bob Hoye. The initial charts are mine.
This material is based upon information that Sitka Pacific Capital Management considers reliable and endeavors to keep current, Sitka Pacific Capital Management does not assure that this material is accurate, current or complete, and it should not be relied upon as such.
Recommended Content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.