Category: Silver

On October 14, 2024 it was noted that “Engrbytrade™ daily and weekly silver calculations are currently not indicating consistent readings where a significant decline would be expected”. These calculations were based silver bullion and U.S. Dollar values. Additional research indicates the relative value of silver to the U.S. Dollar is provided through their derivatives, SLV and UUP. Calculations for the relative value chart below indicates silver is undervalued and in a position similar to where it was on July 2, 2010.

Note that this information is for educational purposes only and not a recommendation.

Silver charts courtesy of StockCharts.com.

Disclaimer

Unlike gold, Engrbytrade™ daily and weekly silver calculations are currently not indicating consistent readings where a significant decline would be expected. There are current structural changes related to 2007. The charts below indicate silver is following a path similar to that of late 2007. What would be expected is a change in silver derivatives that reflect a move to the $40 mark in silver. In 2007 it was the $20 mark where investors were lured as Market Makers sold their inventory to the public. What followed was a sharp decline going into 2008.

Market Makers are once again working on the investor’s anticipation of higher prices in order to sell their inventory to the public. This time it would be expected to see a level of $40 in silver before a decline begins in 2025. This type of psychological gamesmanship is explained in Richard Ney’s book, “Making it in the Market”.

Note that this information is for educational purposes only and not a recommendation.

Stock charts courtesy of StockCharts.com.

Disclaimer

 

On August 10, 2024 futures trading data calculations indicated traders expect silver to move significantly higher, just as it did in 2010. On August 12, 2024 daily Engrbytrade™ silver derivative calculations provided an upward direction confirmation of futures trader expectations. The following chart indicates silver is on a path that is similar to what occurred in 2010.

Disclaimer

Calculations from January 16, 2024 through August 9, 2024 are similar to January 5, 2010 through September 14, 2010. Based on results that are similar to 2010, traders still expect silver to move significantly higher.

Charts are courtesy of StockCharts.com.

Disclaimer

As of July 9, 2024, Engrbytrade™ futures data calculations show silver total reportable positions are similar to the data recorded on August 24, 2010. Silver is expected to continue moving higher as is did in late 2010 and early 2011.

Charts courtesy of StockCharts.com.

Disclaimer

On August 15, 1971 Richard Nixon announced the suspension of converting dollars into gold or other reserve assets. This event was followed by silver prices moving higher between 1971 and 1974.

On June 6, 1974 the Saudi Petrodollar Memorandum of Conversation was issued. This initiated the process of Saudi Arabia investing proceeds of oil sales into U.S. Treasury’s. It also provided the U.S with a global reserve currency. The price of silver continued to rise as Economic Recovery and Bailout Packages continued to grow exponentially.

Forty years later a select group of countries signed the BRICS Development Bank Treaty in July, 2014. This bank will simplify settlement and lending among BRICS countries and reduce the dependence on U.S. Dollars and Euros for trade. It will also start a long term trend of Dollars moving back to the U.S. as countries around the world conduct trade with their own currencies. The price of silver is expected to move higher over the long term as this process continues.

Charts courtesy of StockCharts.com.

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On March 30, 2024 it was noted that confirmation was needed in silver before it could move higher. A review of daily Engrbytrade™ calculations currently indicate a pullback within silver’s long term ascending triangle is planned. Similar pullback signals occurred on August 10, 2020 and February 1, 2021. Since April 3, 2024, computer program selling of very large block trades in derivative products, such as SLV, has increased. The long term move upward from silver’s ascending triangle is still expected.

Stock charts courtesy of StockCharts.com.

Disclaimer

Additional research developed Engrbytrade™ intermarket futures trading data calculations that identified non-commercial silver futures trader positions relative to the U.S. Dollar.  This provided key turning points shown in the chart below. Volatility in silver will continue, but the upward trend is still intact.

Stock chart courtesy of StockCharts.com.

Disclaimer

On March 7, 2024 it was noted that a confirmation move above silver’s ascending triangle was needed before both metals are expected to move higher. The chart below illustrates a technique used by Market Makers to distribute their inventory to retail investors. Prior to the move up in April 2024, short term computer algorithms were initiated by Market Makers to accumulate inventory. A move upward was then made for distribution trades between April 2, 2024 and April 3, 2024. Silver is still expected to stay within its ascending triangle based on the need to fill a futures market gap created on March 1, 2024 at 11:05 a.m.

“If specialists want investors to buy stock, they simply raise stock prices sharply. This creates demand. If they want to cause massive selling, they drop prices precipitously. It is merely a problem in engineering.”
Richard Ney, Making it in the Market, 1975, page 85

Note that the chart shown below is for research purposes only and is not a recommendation.

Stock chart courtesy of StockCharts.com.

Disclaimer

On September 24, 2023 a chart was provided to show the relative value of silver derivatives vs. U.S. Dollar. The following relative value update continues to show silver is undervalued and aligns with the expectation of a long term move upward.

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On March 7, 2024 an ascending triangle was provided for silver and gold. This noted the need for confirmation in silver before moving significantly higher. In addition to this, the following charts provide a perspective on silver’s current ascending triangle position compared to 1973. An initial move similar to what occurred in the first quarter of 1974 is expected. Economic reasons for this move are outlined on the December 24, 2023 post.

Stock charts courtesy of StockCharts.com.

Disclaimer

On September 6, 2022, Engrbytrade™ weekly intermarket futures trading data calculations provided results indicating a change in direction. This was followed by silver’s upward trend.

On December 24, 2023, it was noted that daily Engrbytrade™ Silver/U.S Dollar derivative calculations were moving in a direction that confirmed silver is nearing the completion of a long term ascending triangle structure.  This is similar to what occurred between 2008 and 2010.

Silver is expected to move though its ascending triangle, but another signal would provide confirmation that an upward trend will continue.

Stock charts courtesy of StockCharts.com.

Disclaimer

Since the U.S. went off a gold standard in August 1971 economic recovery and bail out packages have grown at an exponential rate. Between 1970 and 1972 a total of $54 billion in economic related funding bills were approved. Between 2020 and 2022 a total of $7.59 trillion in congressional bailout and economic rescue plans were approved. This does not include annual government budget funding that continues to raise the national debt.

It has been observed that silver charts develop within an ascending triangle either during, or within a year after each of the periods listed below. For example, after the 2008 and 2009 bailout packages were approved an ascending triangle formed, as show in the second chart below. After moving through this triangle, silver quickly moved up to the $49 range by April 2011.

Once again, numerous bailouts and rescue packages were approved by Congress between 2020 and 2022. At this point a silver chart structure is developing within an ascending triangle that it is on course to be completed in the first quarter of 2024. A quick move up in silver during 2024 is expected to be similar to what occurred during 1974 and 2011.

Note that daily Engrbytrade™ Silver/U.S Dollar derivative calculations are moving quickly in a direction that confirms silver is nearing the completion of a long term ascending triangle structure and is similar to what was developed during 2008 and 2009.

U.S. Economic Recovery and Bailout Packages

1970 – 1972
$15 billion Economic Stabilization Act of 1970 signed on August 15, 1970
$2.25 billion Emergency Employment Act of 1971, signed on July 12, 1971
$15.8 billion Revenue Act of 1971, signed on December 10, 1971
$21 billion Education Amendments of 1972 signed on July 23, 1972
Total = $54 billion

1974 – 1979
$11.9 billion Housing and Community Development Act signed on August 22, 1974
$23 billion Tax Reduction act of 1975 signed on March 29, 1975
$56 billion Health Education and Welfare Programs (majority approval by Congress) September 30, 1976
$20 billion Economic Stimulus Appropriations Act of 1977 signed on May 13, 1977
$18.7 billion Revenue Act of 1978 signed on November 9, 1978
Total = $129 billion

2008 – 2009
$700 billion Emergency Economic Stabilization Act of 2008 signed October 3, 2008
$787 billion American Recovery and Reinvestment Act of 2009 signed February 17, 2009
Total = 1.487 trillion

2020 – 2022
$2 trillion Cares Act was signed on March 27, 2020.
$1.9 trillion American Rescue Plan was signed on March 11, 2021.
$1 trillion Infrastructure Investment and Jobs Act was signed on November 15, 2021.
$2.2 trillion Build Back Better Act was signed on August 16, 2021.
$750 billion Inflation Reduction Act of 2022 was signed on August 16, 2022.
Total = $7.85 trillion = 5.28 times larger than the 2009 and 2009 bills noted above.

Stock charts courtesy of StockCharts.com.

Disclaimer

 

On July 24, 2023 it was noted that British Pound Commercial Futures Trader expectations would impact the price of silver. Since that time the average relative value of silver derivatives have moved into a position of being “Extremely Undervalued”.  The following chart provides a representative average relative value of silver derivatives vs. the U.S. Dollar. Calculations are adjusted as the average trend line changes. The current position of this relative value provides an expectation that silver should move higher over the next several months.

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Since 2014 Engrbytrade™ futures trading data calculations have shown British Pound Commercial Futures Trader expectations oscillating to the point where they eventually impact the price of silver. The peak of each oscillation in these contracts (shown with dark arrows) occurred on July 1, 2014, August 16, 2016, March 14, 2017, April 17, 2018, August 6, 2019, March 2, 2021 and most recently on July 18, 2023. After each Commercial Futures Trader oscillation peak, silver ultimately moved in the direction of a declining trend. The peak of silver’s relative value against the Pound, as measured by Engrbytrade™ Non-Commercial Trader’s expectation calculations, are shown with red arrows.

Stock charts courtesy of StockCharts.com.

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Daily Engrbytrade™ silver calculations and weekly futures trading data calculations show April 25, 2023 was a peak position and is similar to where silver was on April 19, 2011 and August 6, 2020.

Stock charts courtesy of StockCharts.com.

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Daily Engrbytrade™ silver calculations indicate a sharp decline below $20 is expected to occur over the next 30 days. This will be similar to the decline from April 11, 2022 to May 12, 2022.

Stock chart courtesy of StockCharts.com.

Disclaimer

Based on weekly Engrbytrade™ intermarket futures trading data calculations, silver is in the process of repeating chart structures developed between 2017 and 2019, as shown below. The result of this structural development indicates a sharp decline is expected in 2023 that is similar to what occurred during the first quarter of 2020.

Stock charts courtesy of StockCharts.com.

Disclaimer