Friday, March 2, 2012
Silver retreats from Resistance but holding Support
Silver bulls could not take the metal through the resistance zone near $35.50 so the market has now retreated lower as longs take profits and some new shorts sell against that level. Support remains down near the $34 level and the spike low from Wednesday's wild takedown.
Mostly algo trading to the downside on weak dollar - Entirely predictable. The good news is that it looked like (at least to me) that the cartel has started scaling into covering their shorts, and a solid floor seems to be in place at 1705/34.50. So while specs go short at exactly the wrong time, the cartel is going long. If we can get a little help from our DXY friends, Monday and Tuesday could be big breakout days as the cartel has to cover to cleanup the COT to get those short numbers down to look better.
ReplyDeleteFor the algos - DXY will be the key. If the manipulators push it right to 1.3, we'll see more consolidation. I've said before that the market was in good equilibrium at 1.3 to 1.31. They got greedy and pushed it way up to goose the markets. Mission accomplished, but they unleashed a wave of inflation in the process, and are now trying to get the genie back in the bottle.