Sunday, June 5, 2011

Good Silver Short Entry Point Presenting Itself? 8:30PM CST 6/5

(Chart 1 - Daily Silver ZOOM)

I am bearish paper silver (such as ETFs and futures) for reasons detailed here on Friday.

37.50 is the overhead line in the sand ultimate resistance.

However we just had a nice run up into a Fibonacci cluster at 36.80(62% of May 11 high to May 12 low)-36.96 (50% of May 26th high and Jun 3rd low).

I think this area can be sold with targets from this post here still valid

WTI Crude Oil Daily Chart Weekend Look Ahead 6/5

(Chart 1 - WTI Crude Daily ZOOM)
(Chart 2 - WTI Crude Daily)

As expected, crude oil is making a battle around the $100/barrel level.

It looks like it is starting to form the 2nd shoulder of a head and shoulders (H&S) pattern.
The light blue bullish uptrend was in place well before this H&S developed.
However, it tracks the "neckline" of the H&S perfectly.

This line, as well as the midpoint of the current bearish channel (magenta dotted line), provided good support on Friday. We then rallied back over 100.

I personally sold this rally and feel crude will hold under 101. I need to see it close under the light blue uptrend line before a close over 101. Should this happen, I look for a test of the 95-96 area that has shown tremendous buying strength in the past. However, I feel if we get there again, we will get through it and test roughly 92.50. Also, I think if we get to 94 or less, any subsequent rally can be sold with 95-96 being very strong resistance.

SnP Daily Chart Weekend Look Ahead 6/5

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

We finally broke out of the 1308.5-1347.75 trading range, closing at 1296.25.

This is significant support as it is the conflunce of:
-Bottom of current bearish channel (orange)
- 38% retrace (shallow Fibonacci) of Nov 2010 lows to May 2 high
-62% retrace (deep fib) of March 2011 "Japan" low to May 2 high

However, 1308.5 is now the ultimate resistance. (keep in mind they can exceed it by a few points intra day, but a close of 1310+ gives me serious pause about this downtrend continuing.)

Readers know, I have been short the last few days.
I covered a good chunk of my position towards the end of Friday.
I see us getting back up to 1305-1310 soon.
I will be using such pops to add to current shorts and target 1290 and ultimately 1273