The silver (SILVER) price is subject to an imporant battle. Arguably it is THE most important battle between bulls and bears, not only of the last 3 years but also for 2019. It might make or break our silver forecast 2019, and consequently also our silver stocks forecast (SIL).
The battle between bulls and bears is visible on silver’s price chart.
Embedded below is the daily silver chart since December 2015. When this amazing rally started back then (green light background), the price of silver shot through each and every resistance every couple of weeks.
As you can see the setup between then and today has similarities: the rounding bottom, a first rally with a retracement, a second rally with a retracement, above average effort to overcome $15.75. The specific level $15.75 was an important price point back then, and still is today!
Bull and bears are now in an important battle, for two reasons.
- As mentioned, overcoming the $15.75 price level is an important challenge. It is one of those 1% price points that really matter, as per Tsaklanos his 1/99 Investing Principles.
- This price point coincides with the apex of a triangle that is in the making for 3 years, essentially representing the retracement after the wild swing of 2016. See chart. What’s more interesting is that similar ‘breakouts’ out of this triangle resulted in failed attempts, all 3 attempts took place in 2018 and lasted between 1 and 3 days.
However, this attempt is lasting for 5 days, and there is no resolution yet.
So far silver bulls try to break out. After 5 trading days, much more than in previous instances, bulls and bears are fighting for/against this ongoing breakout.
The 2019 silver trend will depend on what happens in the silver market in the next few days. This tight range of $15.60 to $15.80 is a pivot point, a make-or-break level. It makes sense that silver bulls and bears are fighting this battle.