Wednesday, July 2, 2014

Maund On Silver


Latest COT data released on Friday shows an astounding ramp in Commercial short positions in silver that it believed to be unprecedented, and given that silver is now critically overbought after 14 up days in a row up till last Thursday, it is safe to assume this means trouble.

On silver’s 6-month chart we can see its robust advance of recent weeks and how it has arrived at a resistance level in an extremely overbought state – critically overbought in the case of its RSI indicator. Without looking at the COTs we would expect it to consolidate or react back somewhat here before the advance resumes. When we take into consideration that the Commercial’s short positions in silver have exploded in just 2 weeks to levels exceeding those ahead of the March peak, and also that gold has just stalled out at important trendline resistance, it becomes clear that there is trouble brewing, and that it is probably imminent.
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