Tuesday, November 8, 2016 3:50 AM EDT
Silver, the restless metal, tends to move in a very violent way, both up and down. But is silver bullish or bearish right now?
2016 was very bullish for silver, and most experts and media quickly turned from very bearish late 2015 to very bullish in the first months of this year. In recent weeks, with the uncertainty surround the U.S. elections, gold and silver are on the forefront again, and bullish predictions are all around.
Investors should not fall into the trap of being influenced. If anything, an investor should develop its own rule based methodology and execute this with discipline. That is the only way to neutralize influences from the outside world.
In our case, we have clearly chosen to have a chart driven methodology which is complemented by sentiment and risk indicators. Although we cannot be correct 100% of the time, our disciplined approach results in a higher than average success ratio.
Back to our original question. When it comes to silver, our chart analysis shows that silver is neither bullish nor bearish at this point. However, that is about to change very soon, without any doubt. Why? Because the silver price is very close to confirm a bullish or bearish scenario.
- Silver will become bullish once it clears $21 which is only 15 percent from today’s price level.
- Silver will become bearish once it goes below $17 which is only some 8 percent below today’s price, as that will be the first confirmation of a lower low (see red circle on the chart).
We still do not exclude a bullish scenario for silver. We are closely watching the $17 and $21 price levels which, according to our view, will determine a bullish or bearish outcome for 2017.
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