Thursday, May 5, 2011

Silver Parabola

For the next couple of weeks, it is likely silver will trade down to sideways - ultimately bottoming around 32-35 area.

Let's start with the weekly chart:


As you can see, silver is headed down to at least the blue trendline.  Considering the massive volume of the selloff the last couple of days and the parabolic move up, I can imagine silver piercing thru that blue line.

Now, I'm pretty new to trading silver.  It's a very small market so a few hedge funds can easily take the metal higher as soon as it touches the trendline.  I dunno, but I'm treating silver as though it's like any other stock out there.  Sideways (at best) to down the next few weeks is my call.

Here is the daily chart:


The bulls will attempt a bounce tomorrow around 38.8 .   If successful, silver could rally for maybe 2-3 days before it comes back down and retests.

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