Tuesday, June 7, 2011

Silver - Fibonacci Fans

SLV is hitting up against some resistance levels.  Fibonacci fan supports at $35.25 were tested hard last week, and unlikely to hold on another test.  The main Red trendline rests in the low $33.00 area.  The Red trendline has already been tested twice. 
30min Chart
4hour Chart


  1. Hi bud

    I remain short silver - I think its about to drop very hard... especially when you see the dollar moving up again soon , then precious metals will drop hard , and gold should follow down imo.

    Even with the euro rallied big last week silver has not gone up - just wait when the dollar rallies- you will see silver plunge...

    As I am writing dollar is neutral/green and silver is off -1.5% futures....

    Take a look at the charts on my blog some interesting charts imo - also longer term charts....

  2. SC, pretty quiet around here today. We tested the fan support overnight (Silver future hit $36.09, which is roughly $35.20 in SLV), bounced, and probably not much action for the rest of the day. I suppose you still expect another FIB fan test soon, and after that, a possible trend line test.

    BTW, tomorrow Trichet could move the eur/usd big, and that should have a decent impact on the commodity complex.

    I wonder what you make of the SPX action as of late - it doesn't seem to ever catch a bid, and everybody is looking for a 1250 test. This alone makes me think we might get a bounce way ahead of it, to then sell-off again. However, given new downward trend, as said a couple days ago, I'm not sure it's even worth (from a risk/reward) perspective)to play the possible bounce.

  3. SLV bounced off 35.80 5 times today. Does this look like a top to you guys?

  4. It does to me. I had a small long position in SLV (via calls) and closed it this morning. Gone short in SLV now via puts.

    SC: I look forward to your long term analysis of silver and why you see the drap door opening in the coming months.

  5. Yes GL, I'm thinking along those sames lines as well.

    Agree - 1250 seems a little too obvious here without a bounce first. 1278 is an important fib from March 1249 low to 1370 high.

  6. Gold has been trending down this week as well.

  7. I think we could gap up tomorrow and make a bounce tomorrow........

    Got a few trading shares longs by close and today looking for a bounce tomorrow or so....

    Overall still holding swing short as I have a bottom fib date at Mid June (next week) so a bounce now - then further down to make a bottom sometimes next week :-)

    How about - bounce thursday-friday , down next week into wednesday ? :-)

  8. Well SC, I'm expecting an SPX bounce here but, as it might be shallower than previously anticipated, I'm just not gonna bother with it.

    As for silver, not only correlations are out of whack, but it's been trading "funny" as of late - it might be some sort of artificial calm ahead of the flush. As for today, I think silver simply caught a bit of a bid on the back of the huge crude rally.
    Whatever it is, I think we need some down move soon enough, otherwise the door could be shut in the very short-term, and we might bounce. Either way, I'm patiently staying short, given medium-term outlook. Worst case, I take a BE stop.

  9. When I look at a 30 min chart of silver futures over the last month, it sure looks like we've been in a triangle for the last month. Depending on your favorite method of analysis you could call this a bear flag, continuation triangle, or Elliott B wave/2nd wave; it all suggests we ought to break through the bottom of the triangle eventually. We corrected 38.2% of the drop already - which is enough - though you sometimes see a fake breakout through the top of these sorts of structures.

  10. Nice Silver chart, thanks.