Today Michael Oliver, the man who is well known for his deadly accurate forecasts on stocks, bonds, and major markets, communicated to King World News that he believes this pullback in gold and silver is a huge buying opportunity.
Gold & Silver Pullback In An Ongoing Bull
February 9 (King World News) – Michael Oliver, Founder of MSA Research: We noted in the weekend report that buying selloffs in this market now makes some sense, given that by virtually every momentum metric the upturn since the September 1st low of $17.28.5 has shifted silver back to bull mode.
Our recent focus has been on one metric that offers an additional major breakout level just above the recent highs. Specifically the 10-mo. avg. oscillator has three times now crested more than $3 above the 10-mo. avg. but not touched $4 over. Touching +4 will constitute a quadruple-top breakout and we think will lead to a tonal change in the upside action. We’ll update that in the weekend report.
Here we look at 50-wk. momentum, just a bit longer term than the 10-mo. And as you can see, the recent upside cleared a massive downtrend structure as well as the top of a parallel channel. That surge also exceeded the prior oscillator highs seen back in March 2022. The pullback is therefore corrective and counter to the now positive momentum trend.
And in general it’s down to the levels that generated those positive breakouts on this oscillator. (Note: precise concern about the zero line/50-wk. avg. is not important. It’s just that that general area looks like it will be a support zone.) Given that this is a likely area to be watching for an upturn out of this selloff, MSA is watching the daily action for sufficient upturning evidence that argues this pullback is ending. We’re updating as the events progress…
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Now for silver’s daily momentum, here measured against its 3-day moving avg.
Friday’s action generated a daily momentum oversold reading (the upper SD band dropped below the zero line—red arrow).
In our February 7th report we defined that a daily close (settlement) for silver on Wednesday the 8th above the 3-day avg. (i.e. above $22.46) would close over the zero line and thus take out the ceiling of daily oscillator closes from last week—all just below the zero line from Monday to Thursday. Yesterday’s settlement price was $22.42, just below the zero line again. Today down-ticked from that level, further acknowledging that short-term average as a level to close above.
The 3-day avg. for Friday adjusts down to $22.29. Closing above that level tomorrow will be an elbow up over the curbstone and begin a daily momentum process of upside. There’s also a parallel channel top that intersects, such that a daily close .20 over the 3-day avg. will break out above that formidable structure. Daily momentum closes that define that channel top are circled.
But note that so far after the daily oversold situation of last Friday, downside has been small. The key now is to shift it to positive.
We’re also watching such metrics as 10-day and 3-wk. momentum and will be updating those “trading- scale” metrics in the weekend report.
But our main point is that we think this drop in gold and silver isn’t some recommencement of the prior downside, but simply a buying opportunity in what is already a positive technical trend.
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