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Silver ETF (SLV) attempted to climb above its falling channel drawn off the highs it hit a April at $50. SLV looks to have created a very large bearish wick this week at (1).
In the past a large upside failure like this at falling channel resistance is a negative event. A solid break of support line (2) would not be good for Silver! Let’s see next week if this “Wick” was a signal to look for safety in the Silver markets.
What I ee is a bullish flag consolidation pattern, but who knows how long it will go… At some time it should break to the upside, I would love to short it though, and even more would love to see it where it belongs, at 10$ or less!
Chris – your short silver yet?
I know you love this product, both long and short and have been quick to short the metal in the past when some combo of resistance and bearish price action has been at hand yet this time, you’ve been super quiet.
Chris:, what do you say about shorting silver (ZSL)? This looks like one of your classic cases: silver is up against resistance inside a falling channel (line 2) and also seems to have broken support on its short term rise (line 3). But your next post shows the dollar falling, which is likely to push stocks up… And gold…. and silver. Is this enough of a caution against shorting silver? Are there other dangers?
PS. I’m glad Joe Friday is back!
Silver has experienced a huge run up from 29th of December 2011 until the end of February 29th, couple of days ago. Gains almost approached 43% in just two months. One should therefore expect a correction after such a strong run – it is only normal.
Having said that, should we get bearish on Silver? No. The bear market decline of 48% from May 2011 until late December 2011 is done, so we are now in a bull market again. While short term traders like to play both sides of the market all the time, as soon as some candle gives a slight hint of bearishness, the wisest thing to do is not trade against the main trend.