Ninja Trader Chart of the Day 5.2.13

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The leader in the standings, Silver ($SI_F), could even increase by about 5.5%. However, the US Dollar is immersed in the reference week by nearly 1.75% to the chagrin of investors in foreign currencies such as EUR or CHF, which reduces the performance on that end.

It applies to precious metals investors to observe two things from a fundamental perspective that recently attracted attention on the market: On the one hand site it is spoken for a longer time about drains in physically backed ETF’s – offset by an above-average demand for physical direct investments, i.e. a redistribution in favor of holding positions itself for the vault or under the mattress.

On the other hand it is spoken in the markets increasingly about deflation: While inflation has basically pushing up prices for precious metals, it behaves exactly the opposite of deflation. Should a corresponding scenario occur, caution is advised.

In the current reporting of the ECB they announce UNLIMITED supply for European Banks for at least the next 12 month. Finally Europe catches up with the US where the FED already offers unlimited supply for domestic banks. When you now think how that should work out over the long term, you are not alone but hear this: Japan announced to DOUBLE the money supply for its own country within the next 2 years and plans to buy its own long term bonds with at least 75% of that money! Bummer!

As the money goes where the best business is (even when it is a fake business) we expect a shift of money out of the metals into Stocks and Bonds. 

 

Bottom line, the fundamentals indicates a short outlook in the short and medium term.

From a technical perspective that has occurred on the extraordinary crash recovery the last week could be terminated. Therefore, we expect for the coming weeks slightly falling prices and we anticipate more short action into our first technical Target zone (see chart).

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Ninja5.2

 

Today’s chart of the day commentary provided by Christian Hoffman of www.ninjacators.com

 

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