wmeubank@ocp.kcmo.com
111 Presidential Blvd., Ste. 230,
Bala Cynwyd, PA
(May 9, 1997) SILVER: The second week of May was quiet in the silver as it rested below 4.80. The shorts were rewarded this week. The recent rally is seen as a counter-trend move as the end of January is seasonally positive. The 490.5 level was touched Thursday by the July COMEX silver contract. The commercials have remained on the short side as the market moved higher last few weeks. The metals are quiet here. The small specs are long against the commercials short position. Sellers have kept pressure on the market to this point. We did see our projected low price hit at the 488.0 level and saw our 473.5 projected low this week as well. A close on the weekly chart below 490.5 did confirm the current downtrend formation. Look to buy strength here as the figures crushed the stock and bond markets. This has been neutral. The seasonal pattern is neutral for the rest of next month according to CSI, Inc. (our data source) in Boca Raton, Florida, when the trend turns in silver. There were some large spread positions in silver long. We look for a bit more buying in July silver. The 490.5 level was reached briefly on the 7th of April. They players have nibbled on the long side a bit. The economic data out of Washington has not effected silver by more than 5 cents and 2 bucks in gold and platinum over the last 10 years. Since we are now positive, we will look to buy more in May and see no trend change in here. Look for more losses in the next several weeks. Use the 514.0 level for your protective stop. The precious metals sector is becoming a bit more negative here. Gold stocks are rebounding. There is no reason to expect new buying yet. The gold index closed at 97.68 (XAU.X) and indicates a mild recovery that will persist for some time here.
Economic factors include the strength of the European economies and LME stock. There is no reason to hold metals when inflation is low and equities rise. The commercials continue to stay net short. The Consensus Index of Bullish Market Opinion shows silver at 32%, its lowest reading yet. Platinum has begun to sell off heavily. We look for some nibbling from bottom fishers, but they will fail as lower levels come. The next timing point comes on the 9th of May. Look to short and protect your profits with stop at 500.0 basis March silver. The next week brings us more as May begins and the Memorial Day holiday approaches. Watch for strength in July platinum above 376.0 to lead the way as silver and follow suit for now.
July Silver--Position: Close 485 +10.7 cents.
David E. Triester
Added to the WWW 05-09-97
Last updated on 05-09-97
Hosted by:
One Crossroads Place
610 West Maple Ave, Suite WWW
Independence, MO 64050
(816) 252-4080
sysop@kcmo.com