Monday, April 18, 2011

Silver flirting with $44

Silver has made an approach to its next resistance level near $44 which it will have to clear to set up a run towards $46. Its prior pattern has been to make an approximate $2 increase, pause, move sideways and consolidate, and then make the next leg higher as it stairsteps its way upward.

I am a bit concerned by the huge volume earlier in the session but that is only because the market has moved so far, so quickly. Also, we are beginning to see an increase in rollover activity which is going to exaggerate volume readings until we get to the first of May so that has to be taken into account as well when we look at these things.

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6 comments:

  1. MikeSApril 18, 2011 at 2:24 PM

    Dan,
    I think the market is really starting get concerned with Comex Delivery. Between the U of T demand for Physical and the PSLV premium to spot, there are many who smell something rotten in Denmark.

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  2. DanApril 18, 2011 at 7:04 PM

    Dan,

    Would you mind commenting on when you think this market will top-out (short term). As it seems we are getting into a parabolic phase as we had in 2004, 2006, 2008 etc. As you know, those tops ended pretty missy. Thoughts?

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  3. dflyApril 18, 2011 at 8:34 PM

    Great question dan!

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  4. Trader DanApril 18, 2011 at 8:43 PM

    I really have no idea when this market will top. One can use power downtrend lines for trading purposes (trendlines that are drawn on the very short term trend) as a sign of a short term top but that does not mean that the trend is finished. It oftentimes signified merely a pause in the prevailing uptrend which can then resume after a period of consolidation. The silver market is very extended to the upside but so far has not yet shown evidence that it is topping out. It does need to be monitored like any other market does because things change so quickly nowadays on account of the computerized trading systems.

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  5. jake the snakeApril 19, 2011 at 3:14 AM

    Dan--enjoy and benefit from what you do, thanks

    Is that your picture? Get rid of the gray! :-)

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  6. Trader DanApril 19, 2011 at 10:10 AM

    Jake - I worked hard to get that gray hair!

    ReplyDelete

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