Silver Attempts a Pre-Fed Breakout
Silver has been dead money since the summer as the U.S. dollar ripped higher. But now it’s attempting a breakout – despite next week’s looming Federal Reserve meeting.
Notice how the iShares Silver Trust made a higher low on January 6 versus its nadir the previous month.
Next, consider the level above which it made the higher low: $19.80. That price marked a false breakdown on September 29, which turned into a double bottom on December 15. It’s also near the bottom of the longer-term range since the white metal’s face-melting rally in mid-2020.
Third, Monday’s bounce has established SLV above December’s peak of $21.59. So we already had a higher low, and now we have a higher high.
The move also represents a breakout above the 50- and 100-day simple moving averages (SMAs).
The shorter-term exponential moving averages (EMAs) have lined up bullishly as well, with the 8-day EMA rising above the 21-day EMA last week.
Finally, Bollinger Band has squeezed down to the narrower end of its long-term range. In isolation, this means little. This lack of trend could make it easier for prices to start moving if the technical events cited above play out.
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Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
Notice how the iShares Silver Trust made a higher low on January 6 versus its nadir the previous month.
Next, consider the level above which it made the higher low: $19.80. That price marked a false breakdown on September 29, which turned into a double bottom on December 15. It’s also near the bottom of the longer-term range since the white metal’s face-melting rally in mid-2020.
Third, Monday’s bounce has established SLV above December’s peak of $21.59. So we already had a higher low, and now we have a higher high.
The move also represents a breakout above the 50- and 100-day simple moving averages (SMAs).
The shorter-term exponential moving averages (EMAs) have lined up bullishly as well, with the 8-day EMA rising above the 21-day EMA last week.
Finally, Bollinger Band has squeezed down to the narrower end of its long-term range. In isolation, this means little. This lack of trend could make it easier for prices to start moving if the technical events cited above play out.
TradeStation is a pioneer in the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
Important Information
TradingView is not affiliated with TradeStation Securities Inc. or its affiliates. TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. When applying for, or purchasing, accounts, subscriptions, products and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means.
This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
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