SLV Silver ETF – Potential Capitulation Sell-Off

by Olivier on September 19, 2014

The technical picture for SLV – Silver ETF is getting worse by the day. The same somewhat applies to GLD – Gold ETF although the downtrend with gold is less pronounced. I recently tweeted my thoughts on a ‘Silver Surprise Move’:

Click to enlarge:

Always up-to-date SLV – Silver ETF chart on my public list.

As regular readers of my website know:

In uptrends, surprise moves tend to be to the upside.
In downtrends, surprise moves tend to be to the downside.

Interestingly a lot of people who follow precious metals are still in complete denial. When the metals shoot to the upside everything is fine. When the metals are in vicious downtrends the word you hear most often is ‘manipulation’. The following chart shows two classic technical analysis patterns. An ascending triangle and a descending triangle. During bull markets the average gold bug will proclaim that an ascending triangle is a very strong buy signal. During bear markets, you guessed it, ‘technical analysis doesn’t work’.

Click on chart to enlarge:

This chart simply looks extremely dangerous. There are no certainties in life and nobody knows if we will get a capitulation sell-off or not. We are in a strong downtrend therefore the odds are stacked against the bulls. There is confluence of support around the 15$ area. If we do witness a vicious sell-off, areas of multiple support tend to act as price magnets.

Update 09/19/14: Adding an additional long-term monthly chart from my public list. The bearish head and shoulders pattern is adding a lot of selling pressure. Overall the chart suggests the 15$ price area should be a price zone acting as a very strong magnet.

Click on the monthly silver chart to enlarge:

Always up-to-date long-term Monthly Silver Chart on my public list.
Twitter post: https://twitter.com/tischendorf/status/512970284669075457

As usual you do have a choice: You can manage your risk accordingly or you can ignore SLV’s bearish chart. Whatever you decide to do, keep in mind the following:

Great traders offer no excuses.

Think fundamentally, trade technically.

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Nice looking bullish semiconductor stock trading idea. CODE – Spansion is trading at an all time high. The stock is not extended though as the long-term W-bottom and the ascending triangle offer a lot of pattern pressure indicating the real upmove is yet to come. Judging from the pattern a price target in the 30$ looks feasible. the stock is under strong accumulation and is making it very hard to enter. The harder it is to enter the higher the odds it is due to buyers being eager to position themselves as fast as they can. The trend is clearly up and so far nothing looks like this is going to change anytime soon. I bought an initial position. Quick reminder: If price doesn’t confirm my assumption and my analysis I change my mind. No hard feelings.

Click on CODE – Spansion chart to enlarge:

CODE – Spansion company description from the company’s website:

Spansion is a global leader in Flash memory-based embedded systems solutions. Spansion’s Flash memory, microcontrollers, mixed-signal and analog products drive the development of faster, more intelligent and energy efficient electronics. Spansion is at the heart of electronics systems, connecting, controlling, storing and powering everything from automotive electronics and industrial systems to the highly interactive and immersive consumer devices that are enriching people’s daily lives. The global digital industry is rapidly transitioning from traditional computing architectures toward a world where people, objects and machines are in a perpetual mode of communication and interactivity. Data and applications are accelerating at breakneck speed, requiring electronics to work more quickly and be more intuitively responsive. Advances in memory and processor technology will fuel this ongoing evolution of the digital infrastructure that is now fundamental to how people work, live and play. Spansion is at the forefront of this fast-paced interconnected world, delivering a broad portfolio of Flash memory, microcontrollers, analog products, and mixed-signal, as well as integrated system-on-chip solutions. Our leading-edge intellectual property and products are driving the development of high quality, reliable and economical devices that are faster, intelligent, efficient and secure.

What is most likely driving the stock price though is the first paragraph of their press release from June 5th:

SUNNYVALE, Calif., June 5, 2014 /PRNewswire/ — Spansion Inc. (NYSE: CODE), a global leader in embedded systems, today announced a new family of power management integrated circuits (PMICs) for energy harvesting that can enable a “Greener Internet of Things (IoT) by eliminating the need for or extending the life of batteries in a multitude of IoT devices from individual wearable electronics to the nodes in wireless sensor networks. – I highlighted the important and catchy phrase.

Love small losses. Hate large losses.

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A China stock trading idea that is trading near its all time high. I am talking about WB – Weibo better known as the ‘Chinese Twitter – TWTR‘. The chart took out the all time high on an intraday basis and has pulled back since. In a few days we will know if this a bull flag in the making or if this was a false breakout to the upside. It is too early to tell, but based on the volume pattern and the long flat base pattern a consolidation pattern looks like the scenario with the highest odds. WB is displaying a lot of relative strength. This might very well be an early sign that WB is starting to emerge as a future leader. I bought an initial position on Friday and will increase my position if the bull flag scenario I outlined in my chart annotations comes to pass.

Click on WB – Weibo chart to enlarge:

WB is part of my China Internet III. Sector Overview Chart on my public list.

The rather conservative bull flag price target area is around 28-29$. This is a trade that displays enough strength confirmation for me to be willing to put on a trade. But it is still slightly anticipatory in nature. For a purely reactive trade in nature one would have to wait for the stock to take out its all time high or at least break out of a bull flag pattern.

Today’s quote is taken from one of my favourite posts: Sun Tzu’s Principles

He who knows when he can fight and when he cannot, will be victorious. - Sun Tzu

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This weekend’s bullish stock trading idea is a company that is the owner and operator of the world’s largest fleet of handysize liquefied gas carriers. Why ‘bullish’? Simple. NVGS – Navigator Holdings closed at an all time high. Volume is slowly and steadily picking up. An entry right here makes sense as the stock is not extended and is trying to break out of a sound 3 month base providing decent pattern pressure. We are starting to see bullish moving average expansion but the stock is still offering a low risk entry with a stop loss placed below the MA 50. I bought an initial position.

Click on NVGS chart to enlarge:

Always -up-to-date NVGS – Navigator Holdings chart on my public list.

This is another ‘Blue Sky Potential’ stock with no overhead resistance. So when it comes to defining price targets it is anyone’s guess how high these type of stocks can move. A close above the recent intraday highs at 30.75 will most likely spark more interest and lead to a further increase in volume coming into the stock. If that happens, this could be the beginning of a thrusting move to the upside.

NVGS – Navigator Holdings company description from Yahoo finance:

Navigator Holdings Ltd. owns and operates a fleet of gas carriers worldwide. It offers international seaborne transportation and regional distribution services of liquefied petroleum gas (LPG), petrochemical gases, and ammonia for energy companies, industrial users, and commodity traders. The company also provides dry docking services. As of December 31, 2013, it owned and operated a fleet of 23 gas carriers, including 17 semi-refrigerated vessels and 6 fully-refrigerated vessels. The company was founded in 1997 and is based in London, the United Kingdom.

I made up my mind to buy high and sell higher. – Nicolas Darvas

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Quick post with a nice clean chart that looks very bullish as there is no overhead resistance and the stock is trading above the moving average 20 indicating good momentum. ZSPH – ZS Pharma is a recent IPO so I only initiated a small position. As long as the stock doesn’t put in 2-3 consecutive closes below its MA 20 nobody knows how high momentum can continue to propel this stock higher. With so-called ‘Blue Sky Potential’ stocks anything can happen as the famous market adage ‘Surprise moves in uptrends tend to be to the upside’ applies.

Click on chart to enlarge:

Always up-to-date ZSPH – ZS Pharma chart which is now part of my most recent Biotech Sector Overview Chart.

ZSPH – ZS Pharma company description from Yahoo finance:

ZS Pharma, Inc., a development stage biopharmaceutical company, focuses on the development and commercialization of non-absorbed drugs to treat renal, cardiovascular, liver, and metabolic diseases. The company’s proprietary zirconium silicate technology creates ion traps that could reduce toxic levels of specific electrolytes without disturbing the balance of other electrolytes. It is developing ZS-9, insoluble non-absorbed zirconium silicate that is in Phase III development for the treatment of hyperkalemia. The company was founded in 2008 and is headquartered in Coppell, Texas.

The key to trading success is emotional discipline. If intelligence were the key, there would be a lot more people making money trading… I know this will sound like a cliche, but the single most important reason that people lose money in the financial markets is that they don’t cut their losses short. – Victor ‘Trader Vic’ Sperandeo

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Tesla Gigafactory Battery Investment Theme – Lithium And Graphite Mining Stocks Chart Analysis

September 9, 2014

A new investment theme is starting to emerge. I am talking about Tesla’s ‘Gigafactory’ that is going to be built in Nevada. Tesla is going to significantly ramp up Lithium battery production. TSLA the stock is trading very close to its all time high. KNDI – Kandi Technologies a much smaller Chinese play is one [...]

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A great example for healthy bull market action would be VRNT – Verint Systems. The stock is displaying an overall bullish accumulation volume pattern and has recently started printing new all time highs. The daily pattern pressure looks like it qualifies as enough of a base to allow for significant further price appreciation. Furthermore the [...]

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INFI Infinity Pharmaceuticals – Biotech Stock With Buyers In Control

September 8, 2014

Here’s a Biotech stock with a big catalyst: INFI – Infinity Pharmaceuticals. The recent news triggered a massive gap up that qualifies as a break-away gap. Needless to say this type of volume is most likely game-changing volume. Technically speaking this simply means buyers are now in control. You have several choices here. You can [...]

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MTSI Macom Technology Semiconductor Stock – Chart Trading At All Time High

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Here’s another quick trading idea as right now MTSI – Macom Technology is one of the best looking semiconductor stocks out there. The stock is trading at an all time high. The stock also closed near its all time high. When this happens before a long weekend it is a very bullish sign as traders holding [...]

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IBB + FBT Biotech ETF Charts Printing New All Time Highs

August 27, 2014

We are trading at new all time highs. The Biotech ETFs IBB – iShares Nasdaq Biotechnology Index Fund and FBT – First Trust Biotechnology Index Fund have done it. This is something you should pay close attention to. Why is that you might ask… It’s really simple. So many are screaming overvalued, unsustainable, parabolic blow-off [...]

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