While my crystal ball is in the shop, and I am unable to tell you exactly what will happen in the co...
How to Spot a Reversal in Silver
04/27/2011 7:00 am EST
A potential bearish warning sign has posted on the chart for silver, and a critical support level now stands out as the level, if broken, that could signal a top for the high-flying metal.
Last Thursday, I wrote an article about silver, which we described as being “on a tear.” We have since added 10% and then given back 10%, rejecting a high just shy of the psychologically important $50 mark.
I also wrote in the previous report:
“This is no reason to go short. Selling something that’s going up is dangerous, bordering on stupid. Sure, it probably can’t go on, but for now, there’s no sign of a reversal in sight.”
This line from last Thursday’s report seemed to create a bit of a stir and it looks like it was quoted on at least one newswire story.
But it begs the question, what is a valid sign of a reversal?
First, here is a current chart of silver showing the upward channel:
How about that candle with a large range but a really small real body? Yes, that sort of thing—a “long-legged Doji”—is always a signal to look for a market turn.
On Monday, silver traded up to 49.820. In Tuesday’s early-morning session, we had traded over 10% off of this high.
Interesting times. Where did we top out the last time around, when Bunker Hunt was buying all the silver in sight? Around $50, give or take.
Channel support is at 42.735. We would “call a top” if the market drops through here, especially if it happens quickly.By Clive Lambert of FuturesTechs.co.uk
Related Articles on COMMODITIES
Markets are now in their Santa phase. Expect rallies with brief interruptions for consolidation or p...
The pound has acted well against the dollar in the midst of Brexit. Friday was a reversal day. I am ...
Until the GDX is able to break below 21, the bulls have an opportunity to prove themselves as we hea...