Tuesday, June 21, 2011

Silver Through its 50% Retrace. Shorts Get a Bit Concerned. 7:35 AM CST 6/21

(Chart 1 - Silver 60 min zoom)
(Chart 2 - Silver 60 min)
(Chart 3 - Silver Daily)

First of all let me say this. I have been short silver for a few weeks now, trading around it a bit, but maintaining a decent core of shorts. Yesterday and last night's action has me a bit concerned. I will not puke yet, but my ears are up and I will look to head to the exits if this continues for a few more days.

35.94 was very important resistance. We are now above that and holding it, and that is what has me a bit worried.
36.33 is minor resistance, but I fear that will not hold.
Should it break, we will run into a major resistance cluster, that must hold for me to stay short.

Look at the 60 min chart.
At roughly 36.50, we have a very strong MML resistance @ 36.53, as well as the bottom of the old bullish channel (light blue). We also have the 62% retrace of the most recent selloff (6/10-14) @ 36.55.

I will add up here.
Here is the problem... I would like to get rid of the entire position if silver trades back into that blue channel, or closes over 36.55. However, look at the daily chart. The down channel (magenta) is the overall governor of current price action. Today's high would be just north of 37 to penetrate it. Therefore, I will keep a loose stop on silver, and use this channel to make my puking decisions.

Hang in there, 1 margin hike or dollar rally is all it takes sometimes.


  1. been holding onto my shorts as well. Ugh and its been painful

  2. Sorry if I talked you into it
    Its been a brutal start to this week for me if its any consolation.....

  3. same here. 36.33 is a key point for me - could go either way from there. currently not really getting above it, but not seeming like it wants to come back down either.

    I actually placed a short order at 36.31 last wk, thinking it the high end of the current trading range and thus likely to fall from there. That got triggered today and well, you know the rest.

    I still say we arent back in bull territory until 36.7-ish but right now that's not much comfort.

  4. oh no, please. You've been great and very helpful. I should have adhered to your resistance of 35.94 and sold. But I have been stubborn.

  5. I have been too stuborn on the PMs as well....
    I fired my last shot just now... we shall see