Let's start by examining the weekly chart for a bit longer perspective. For starters, silver remains held under the 50 week moving average so strictly speaking it is still bearish. Once it climbs above this level, funds generally become more involved in the market so that will be the first achievement which the bulls will have to pull off to get the speculators more interested in the market. Note that the over the last two weeks, this level has effectively capped any upward progress although the bulls are working on securing a breach of this important technical level.
You might also notice that there are two sets of Fibonacci levels drawn on the chart. The first, in red, uses the peak near $50 and the subsequent spike bottom near the $26 level. The second set, in blue, uses the failed rally attempt culminating near $44.27 and the same spike low to project some potential resistance levels. The market has rallied back to exactly the 38.2% retracement level of the former and the 50% retracement level of the latter.
You can see that there is a confluence of THREE key resistance levels near the high made by silver this week. Until the bulls can better this level, the stronger-handed bears are not going to run.
What has been happening with silver is that the risk on, or risk-off trades continue to jerk the metal up or down depending on which trade happens to be in vogue on any given day. If we move into next week and market interprets any events in Europe in a negative fashion, silver is going to get sold down along with copper. If the converse is true, silver will move higher alongside of copper.
As has been the axiom of recent weeks, we will know what will happen only AFTER it happens. There is no predicting any of this madness. The bulls are very close to seizing the initiative but close only counts in horse shoes and hand grenades.
"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat
Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput
Trader Dan's Work is NOW AVAILABLE AT WWW.TRADERDAN.NET