Thursday, June 2, 2011

Silver to Have Significant Downside Correction? 10:50 AM CST 6/2

(Chart 1 - Silver Daily Zoom)
(Chart 2 - Silver Daily)

3750 is now the ultimate line in the sand resistance.
3594 was short term support
We are under that now (3584)

Short term support is the low of the blue bullish up channel (currently at 3550)

I see us getting through that in the next few days and testing 3440

If we bounce off of 3440, rallies into the 35-36 area can be sold for a move down to 3280.

Should we get though 3280, we are going to 2970

Long term I like buying physical silver as a hedge on my savings account (yes I'm one of "those"). However, I think it will correct to under 30 in the next few weeks - months and present a favorable entry point before another leg up.

Basically right now, I bet we see 30 before we see 38 (at 36, currently a 3:1 bet), but we will need to get under this blue bullish channel.

Dont sell here if you are conservative
Just keep this in mind for if it breaks lower then comes back up to the blue channel line

If you are aggressive and want to sell upside tests of 36 right here for an eventual break of that blue line, then be my guest ;)


  1. This is all about paper silver trading.
    The COMEX was drained of 38% of it's eligible silver over the last 2 weeks.
    We may only have 60 days to get hold of physical silver before the COMEX is totally dry.
    What will happen to paper silver trading after this physical silver extinction event ?

  2. Thank you for the comment.
    Few things...

    A) I agree that paper and physical are 2 separate things. I am merely talking about paper as a trading vehicle, not as an investment.

    B) I never deal with fundamentals. I am purely technical. I have been hearing the COMEX is dry thing for about a year now. I know they are crooks. But the charts will show it if something is fishy there....

    C) If Comex goes bare, it will be unprecedented and I don't know if that sends silver futures to zero or infinity (essentially is the contract void at zero, or must you acquire the physical at a gigantic premium sending silver to the moon as you and many other ZHers and other silver buys pray for)

    Long story short, I have read everything you have and I fear it too, but I pray to the church of technicals and charts... Fundamentals wait outside in the parking lot ;)

    Thanks again for the input

  3. It bounced off the 32/33 level on 2 occasions lately. Seems 32/33 is the line in the sand for the moment. Silver not following Gold that much on may days as the speculative element is more linked to broader stocks. I would look at S&P behaviour as indicator of Silver direction, short term. As soon as we have some king of QE, I expect AGs to shoot up food inflation starts protests, Silver should take the pressure off the commodities complex and shoot up to 50 something again.

    Your views

  4. Ty for the comment

    32.80 is indeed a line in the sand.
    I see us getting there in the very near term.

    We are now in 2007-2008 mode when we are hit w deflationary news such as bad jobs last few days. With no formal QE3 in sight, and QE2 all but done, people now greet economic weakness with selling assets, and going into quality such as treasuries and cash due to accross board liquidation.

    Previously this year, bad news meant more money printing which would go to speculation in all markets. Now that this is ending, bad news is indeed bad news again.

    As soon as FED pumps more money in with QE3 or whatever they do, yes precious metals will skyrocket and the USD will get crushed.

    All I am saying is I dont think that will happen in the near term. Fed needs cheap stocks to justify it, so we need at sub 1250 snp before they will even consider it.