Long John Silver

With a title such as that, there may be the makings of a new Pirate movie in this post, but alas, it is merely said in jest as it to chase fools Gold listening to what comes out the media mouth pieces.

A little history lesson to show where we were when the media and their pay masters told us to buy. The daily chart shows all the major details we need.

At the top of the chart is the infamous area where the expert in Silver trading told us all to buy because the price was shooting up. At the time I called doo doo on this and history has shown my words to be the most reasonable. Experience teaches us all valuable lessons and this one was in my eyes, a real class and expected message from a trader who was in desperate need of getting him and his fellow traders out of their long positions. Good trading advice neither comes for free or from the media. Buying at high prices goes against what pro money does and should also be against what you do. You only ever buy low and sell high if you can see room for profit, clear targets for stop loss and profit and only after pro money show they are involved.

The initial move up on this time frame has recently been hit by falling prices, but look at the reaction. Price has fallen well into the area where pro money finaly pushed price up out of a range, and now the weekly and daily chart show weakness. The very last candle close of the week shows some selling into the close. We will zoom in closer on this next.

4hr chart.


Looking at the most recent price action there was a strong move down and bought into, but the buying was sustained over a period of time indicating pro money wanted to stop the down move and pull price back up. When price moved back up in reached near term supply on the 3rd last candle. As expected sellers came back into the market in larger numbers. I say sellers with regards to the amount of sell orders.

A reaction to this selling was more buying and we closed near the high of the last candle. We know the main force behind silver is short and the amount of buying gone in needs to be further tested for the presence of selling. If the top of the 4rd last candle is tested and no sellers come in, then price is likely to rise further and potentially into the blue line I have drawn in. This looks like no mans land, but its a major area of interest to pro money if the 3rd last candle is broken.

Pro money needs lots of opposing orders to get the cheapest entry price and make it appear price will continue to rise. None of us know how long it will take for price to climb back up to where enough sell orders have been placed into the market. But using some logical thought, we know the main use for Silver is an industrial metal for plating in electronic etc. Looking at that sector I do not see (and pardon the pun) any silver lining and the main US trade indices  do not show much growth or good news there either. So the value in silver is pretty much for the bears at the moment.

The blue line is NOT a fixed price, it is an price area and there will be some wiggle room around it. As price gets into the area where pro money are interested, price will become erratic on lower time frames. That is order flow, plain n simple.

And for some show and tell.........the 30min chart ahead of time.

My blue line at the same price area.....and what do you know, a little price are where price took a double step before falling lower in the past. So you too watch this area if price makes it back. This is part of the price area where I will watch with great interest. The indicator traders out there will see their whizz bang stuff telling them to buy, media pimping silver is on a tear and we on the other hand, sit and wait to see will sellers come in and if they do, we will know where and why. Its better to get to watch a story unfold where you almost can see the outcome before hand.
 
So now, you watch wait and be patient. The trade will come to you if you let it, and trade what you see and not what you think.