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Silver Centric with Mike Maroney

Mike Maroney
June 5, 2018
Video Transcript

Mike Maroney: Good afternoon! It's Tuesday, June 5th. My name is Mike Maroney and I am coming to you today from the Monex Precious Metals Studio. We're going to start a new video series. We're going to call it, Silver Centric. I've been trading silver for well over 25 years and the hope is that we can give you some information that will help you potentially profit based on the movement that takes place in silver.

Now, for those of you who have been following silver, you know, since the beginning of February, silver has been trading in a sideways channel with the lowest close we've seen since that time right at $16.18. Since that time, we've been contained by the 200-day moving average, which currently sits right at $16.80. In that entire time frame, going all the way back to February 1st, we've only been able to close above that 200-day moving average three times. Other than that, we've gone up and hit that number six times, but each and every time we've backed off and pulled back down into the $16.20-$16.30 range. If you noticed today, we actually traded into the mid-$16.30's today, but we've popped back to the upside.

Now, the interesting piece of information that I want to share today, for you silver traders, is what sits out on the horizon as far as the Fed interest rate is concerned. Now, many people look at the Fed and believe when they raise interest rates, potentially, the price of precious metals comes down, but what we've seen over the past, and I'm going to go back all of the way to December of 2015 and talk about where silver was trading on the day of the increase and where it ended up trading in the next 60 days, and I think you'll find it very interesting. Because what we found is... it's not unusual for the metals to back off into the announcement, but after the announcement you'll find that we've actually seen something that's very interesting.

Let's go back and talk about the announcements. On December 17, 2015, was the first rate increase of a quarter of a point. On that day, silver traded as low as $13.65. Within six weeks, silver traded to $16.00. On December 4, 2016, was the next rate increase. Silver traded as low as $15.90 on that day. Within six weeks, silver traded at $17.75. On March 15, 2017, was the next rate increase. Silver traded as low as $16.82. Within eight weeks, silver traded at $18.60. Then again, in December of 2017 on the 13th, silver traded as low as $15.63 on the day of the announcement, and low and behold within two months, silver was trading at $17.70. Then again, this year, March 21st, silver traded as low as $16.20 and that was the time that we popped up. Within four weeks, we had broken above the 200-day moving average, traded as high at $17.35, held that for three days, and then backed and filled, and came back down into the low $16 range.

So, now what are we looking at? We're looking at silver putting in a classic pennant formation. What does that mean? It means that the lows are getting higher, and the highs are getting lower, and you're coming to a point of a pennant. Ironically, the day that you come to the absolute point on that pennant, is June 13th, which is also the day that the Fed will make their announcement, as far as, the next potential rate increase. What does this mean to you as far as a silver trader is concerned? Obviously, we may see an opportunity to see another potential break out if the Federal Reserve raises rates. Based on the recent sideways channel that we've been trading in, all we would need to do is break back above that 200-day moving average up at $16.80 and we could actually see some fireworks. If you're a silver trader, if you're interested in precious metals, if you have any questions at all whatsoever on how you could potentially maximize your trading strategies, please give us a call here at Monex and we will do everything in our power to help you facilitate trading silver in the physical market where you own real metal. Give us a call today! Thank you.

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