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Silver Update

By: Roland Watson, The Silver Analyst

-- Posted 7 September, 2007 | | Discuss This Article - Comments:

This is a copy of the weekend update I sent to subscribers 5 days ago on Sunday 2nd September. Since then silver is up as high as 5.6% intraday, likewise PAAS is up 6.5%, SSRI is up 19% and gold is up 5.4%. Is the bull market for silver and gold now in full resumption? We think so and will invest accordingly.


Hello subscribers,

Here are the numbers for this week since August 26th.

London Silver Fix Price: $11.95 (+$0.25 on week)

NYMEX Spot Price: $12.02 (+$0.09)
US Dollar Index: 80.75 (+0.08)

Silver RSI: 45.86 (+4.64) (70 overbought/30 oversold)

US Dollar RSI: 45.14 (+2.20) (70 overbought/30 oversold)

RMAR: 0.89 (unchanged) (1.30 overbought)
NYMEX SLI: 1.31 (+0.01) (1.80 overbought)

GSR: 56.23 (-0.25) (15.00 silver overbought)

SLD: 2.04 (+0.04)
GLD: 1.52 (+0.01)

200 and 50 day exponential moving average difference: -$0.25 (-$0.11)



RSI: Relative Strength Index

RMAR: Relative 200 day Moving Average (Refined)
SLI: Silver Leverage Indicator

GSR: Gold to Silver Ratio

SLD: Silver Leverage to US Dollar on a four year rolling basis

GLD: Gold Leverage to US Dollar on a four year rolling basis


My feeling is that the silver correction since May 2006 is almost over if not finished as of the 16th August. Three things make me think this.

1. The 50 day moving average continues to move under the 200 day moving average with a further drop to 25 cents below. Once the 50 day goes back over the 200 day, I would consider that one condition for a renewed bull move.

2. We had a gap up day on silver on Friday. These form when the price opens above the high of the previous day. These are rare and when you look at the accompanying chart, they have been bullish for silver with $3 and $1 moves respectively. Though this is not a sole signal of a finished correction, it should not be ignored!

3. We have also completed an expanding triangle formation on silver which I have also added to the chart. This looks very bullish to me because the completion of the "E" wave normally presages a big move in the opposite direction which has been doubly reinforced by the gap up. I looked up my Elliott books to find out when expanding triangles are most common. The answer was that they are most common at the end of ABC and WXY corrections in the C or Y waves. In other words, we could be looking at the end of this 18 month correction.

Now this does not mean silver will start ramping up a dollar a day, but the downside risk to me is minimal!



Further analysis of silver can be had by going to our silver blog at where readers can obtain a free issue of The Silver Analyst and learn about subscription details. Comments and questions are also invited via email to

-- Posted 7 September, 2007 | | Discuss This Article - Comments:

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