Wednesday, June 15, 2011

Silver at a Crossroads, But Evidence Still Says it is Going Lower 5:25 PM CST 6/15

(Chart 1 - Silver 60 min zoom)
(Chart 2 - Silver 60 min)
(Chart 3 - Silver daily zoom)
(Chart 4 - Silver daily)

After breaking out of the burgundy pennant on Jun 13th, we were weighted heavily towards going lower from there and testing the 34.375 support.
Well, 34.40 is close enough in my book.

Now we have retraced back to the weak MML resistance at 35.94, and the rally stalled again.

Looking at the 60 min chart, we are in a short term up trend (light blue) since we put in lows at 34.40. The highs today stalled at the top of this channel, the 35.94 resistance, and the midpoint of the daily bearish channel (magenta dotted). We had a nice upper wick on that candle and we headed lower.

Short term this channel will govern silver.... However I suspect silver will not be able to get above 36 with any real conviction, and will form a head and shoulders on the 60 min. A subsequent neckline break will then give us the power to get under this bullish channel, back to 34.40, and set up for an eventual test of 32.81, my ultimate support for this phase.


  1. Great charts, Thanks!

    How do you think the Greece situation will affect gold and silver? Ive been trying to wrap my head around it but just not sure how it will play out.

    I can see gold and silver be the safe haven play but on the flip side I can also see people flying into the dollar. If Greece, Spain, or Portugal breaks away then the euro will have lost its chance to be the next reserve currency which will strengthen the dollar. And, if the dollar rises shouldn't that be bearish for gold and silver?


  2. I can see both sides as well which is why I try my best to not think about fundamentals. As I say in my profile page, I think price and volume tell you all you need to know about an asset.

    If I had to say something intelligent about this, I would argue that big funds are very leveraged short dollar and long silver and gold against it. If the dollar keeps rallying and stocks keep falling, liquidations of these funds to meet margin calls will have to depress silver and gold, as they dump shares of gld and slv and gold/silver futures to fund their plummeting aapl and goog and nflx ;)

  3. Good shooting stars and bearish engulfing candles forming on short term time frames on silver, as it, gold, and oil shoot a bit lower.

    I look for it to break the low bound of the 60 min up channel and head into the 34.40 area

    35.60 small resistance with 35.94 still being ultimate

  4. Ended up selling the rest of my puts for a nice gain. Not enough to cover what I lost yesterday but happy with making a little back. Looking for a short reentry.

  5. Just reentered silver put off the 35.60 small resistance. Im hoping we can break 35 on the down side soon. fingers crossed.