Silver is waging a fierce
battle at the current $34.00 level.
As we pointed
out in our last analysis,
we speculated that a double top had formed in silver’s chart and shortly after we wrote that
silver did come off the highs and traded down to below $34.00 to as low as
$33.57 but it didn’t
stay there and quickly reversed course.
At the moment, it is waging
a fierce tug of war with the $24.00 level.
The double top formation is confirmed with the breach of $34.10 but as of yet,
silver looks to be correcting off the drop from
$35.44 before what I predict will be a continued fall to the high $30.00 range near
the 200 day moving average.
I will admit though
that the longer silver holds out here, the better the bullish argument becomes as the RSI has now worked itself off nicely.
However, there is a very
complex head and shoulders pattern forming in
the Euro that I feel will take that
currency down and the USD up, making
silver a victim to the
imminent dollar rally that
should take the USD over
82.00 on the index.
Silver is surely putting up a good fight here
though but I feel too much buying
power has been used up trying
to keep it here and that this tug of war
between the bulls and the bears
will end shortly with the bears prevailing, sending prices to the highlighted range
on the chart. Last night’s
high could have ben the final pop off the
correction from the move from
$35.44 and we will now resume the next leg down.
Disclosure: I took off my
October puts the other day during
the intra-day plunge for a
nice 70% gain. Yesterday
I moved into the November $32.00 puts on the SLV
at 68 cents per contract.