Wednesday, June 15, 2011
(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.
posting a couple days ago that the VIX was showing some consolidation right near the top of its recent channel, it seems that today it finally broke out to the upside and has closed well above the 20 level which it hasnt seen since mid march. Depending on where this opens tomorrow, it might be a good play to try to get in this.