The Silver 'Pennant'

Our fine in-house TA tactician, GrundleMaster 'GM' Jenkins has frequently made reference to the large silver pennant that has formed on the silver chart over the last year (here being a fine example).

He is right to highlight this pennant's importance as, in my opinion, it is this formation that will govern the silver price through much of 2012. So I'd like to take a closer look, and see what conclusions we can draw about suitable buy-points and sell-points (for the traders amongst us) and a wise entry point for those wishing to sit on a stack of the metal for a long period of time (for the investors that grace this site).

Silver Update Mid Week Wednesday

www.goldtrends.net

After hitting the 1998 projection line --- silver has dropped nine dollars to an important trend line. Look for support at the 37-41 area this week. (Ideal low would be 39.50-40.60)

Silver Mid Day Tuesday

http://www.goldtrends.net/

In our last update we were looking for some type of pullback going into last Friday, but the market exploded higher to almost 50 on Monday Morning --- since then a pullback to the upper purple line as the Tuesday low has reached that area ------ where 43.00-44.50 is first support this week. Additional support is the 39-41 area where the upper dotted trend line and lower purple line meet. Ideal low for this week would be Wednesday --- in the 43-44 area. Be careful --- 5% moves in one day ---- or 8% like on Monday is tuff when trading leverage. If cycles play out and seasonals ---- we look for a low this week ---------and then a rally into the first week of May --- and then a two week pullback or consolidation during May.

Silver Mid Week Wednesday

http://www.goldtrends.net/

The silver market has reached the upper boundary of the purple uptrend line -----and has penetrated it higher. Since it's mid week wednesday --- a pullback into Friday morning would not surprise me. Support is the 42-43 dollar area. We shall see.

Silver mid day Monday

www.goldtrends.net Silver reached Monday resistance in the 43.40-43.70 area at the upper purple channel line. This should provide resistance going into Tuesday. Support is the 42.20, 41.60, and 40.60 area. Most importantly ---- the dotted trend line and lower purple line is weekly support. KEY resistance will be 43.50 and up to 44.80 over the next few days. With silver 40% above the 200 day average --- there is no doubt that price (historically) is overbought on a short term basis. The downgrading of US debt and the increased euro debt situation should be supportive of metals. The only thing to watch is the US stock market and the 200 point drop so far today. If the stock market BURPs and begins another leg down -- it may affect all markets on a short term basis........ and keeping in mind the poor performance in silver stocks last week -- one should at least maintain a bit of caution at this price level until the market digests this latest news.

Silver Friday Morning

www.goldtrends.net After hitting the upper purple trend line on Monday -- silver pulled back to just under 40 but lower price could not be sustained and the last two days has silver exploding higher again. The market is in a runaway condition as price keeps escalating higher. The next price level is the 42.75-43.00 dollar area. Prices have the potential of exploding higher at any moment so its best to just keep favoring the upside. Support is the dotted trend line near the $40 area. In summary -- the bulls are in control.

Silver Thursday Update

www.goldtrends.net On this mornings chart --we're using the silver ETF (SLV) to show this weeks pullback was just a test of the trend line we call the pre shortage panic line and price supported very well so far at that area. The other key support on the chart is the moving averages near the 38 area. (NOTE: SLV is currently trading near one dollar lower than spot silver so keep that in mind when you look at the chart) Resistance is the 41.45-42.00 area for the remainder of the day. As long as silver is above the 39 dollar area ----- the upside still has the advantage.

Silver Monday Update

www.goldtrends.net Silver has reached the 41.95 area on Monday and is very close to the upper purple channel line. The highest monthly close in 1980 was 41.50 ----- so there should be some resistance in the 41-43 area. Support is the 40.50, 40.00, 39.30, and 38.20 area. A pullback to the 40 area or even the upper dotted trend line should provide support -- at least initially. The trend remains up -----and the lower purple channel line and the dotted trend lines are first support this week.

Silver Thursday Night Close

www.goldtrends.net Silver is trying to break above the upper trend lines of its price channel and carve out a smaller channel that leads towards the 41-42 dollar area. Price is just consolidating over the last 48 hours just under 40 --- and at the top of the upper dotted trend line. As long as price is within the purple channel lines --- the trend remains up. If silver can hold above the upper dotted trend line --- price could accelerate higher inside the purple channel at an even higher rate of momentum. Watch this area --- its an important one. Support is 37.60-38.20 at the lower purple line.

Silver Tuesday Update

www.goldtrends.net Silver has now pushed above the 39 dollar area ---------- and is at the upper end of its trading range. A push above the upper trend line could bring in a blow off and push into the $41.50 area in silver. This upper resistance line is important --- but the upside can't be eliminated as the trend is still up. As long as silver is above 36.70-38.00 --- the trend is still up on the short term.

Silver Mid Week Wednesday

www.goldtrends.net The longer term silver chart shows price at an upper momentum line and has been trading above and below it all week. Support is the 36.50-37.00 area at the moment. As long as silver remains above the 35-36 area ----- the trend is still up -- but keep in mind that this is an important area for silver --- even on the long term charts. Until the 36 area is taken out --- the potential to move higher remains. Resistance is 37.80-38.30 at the moment.

Silver Mid Day Monday

www.goldtrends.net The pullback in silver has reached the 36.50 area ---- and while support looks to be in the 35.80-36.20 area ---- the bounce at 36.45 may have been the extent of the pullback. There is no doubt that the 38 dollar area is an important resistance area --- but the potential squeeze in silver in not a normal occurance --- and the potential to move above this area cannot be discounted. Closes above the upper dotted line could project up to the 39-41.50 area --- but obviously --risk is high at these levels. The pullback into today was speculated late last week as the Gold Options expiration --- and the roll over from April to June probably played a large part in the pullback. End of month --and beginning of month (april) has in the past favored higher price --- so another push up this week is still certainly in the realm of potential. The price gap from last week is the 35.35 area ---- so support this week should be solid in the 35-36 dollar area. Global tensions and crisis remains strong in all fronts --- debt in Europe and USA, Nuke in Japan and revolt in the middle east. It is forming quite the powder keg. The Japan crisis is a wild card --- as silver is not only monetary -- but an industrial metal. At the moment -- price remains up --- but these resistance levels do need to be watched. A close above 38.25 should be constructive for a push to 39 and even 41.50.

Silver mid day Thursday

www.goldtrends.net

Silver reached the 38 dollar area today and has penetrated above the mid line. A close above that line would be suggestive that price can move higher. With gold options expiration coming on Monday --- and with the metals up all week --- if a pullback into Monday is planned -- today is where it should start. Support is the lower red line at 35.50-36.20 ----- and resistance is the 38.05 area. Let's see if price can close above the middle red line.

www.goldtrends.net

The rally back up in silver has been most impressive --- and should silver move back into the red channel ---- a move towards 38 and potentially higher could be in play. The gap from Monday morning was not filled ---a rare occurance in silver. Closes above 36.56 will suggest higher prices remain the favored trend.

Silver for Thursday

www.goldtrends.net

The silver market continues to find support just under 34 ---- as it has survived three price probes there. Still --- the dotted trend line seems to be a more important area for support -- and a move to test it cannot be excluded. Shorter term cycles are due to bottom --- between now and Tuesday. If the market does test 33 ---- it will be a key spot to watch for a short term bottom. Support today is 33.50-33.70 and resistance is the 34.70-35.00 ----- the G-7 are having a conference call later today. In summary -- the chart pattern does not seem complete just yet ---- and stronger support is the dotted trend line near 33.

Silver Mid Week Update -- Wednesday

www.goldtrends.net

The break of the red channel line this week has so far spurred a rally back up towards the lower red line ---and that has become resistance ----circa 35.00-35.50 for today. Suppoort is the 34 dollar area and yesterday's lows. Key support is the dotted trend line near the 33 dollar area. It would seem a test of that area is in the cards ---- but with silver's strength ---any good news out of Japan could also be a catalyst for a rebound. For now --- yesterday's low seems like first support ---- but the dotted trend line is a stronger area. Its best to remain cautious at the moment. Short term Cycles are due to bottom at weeks end or early next week. The longer term trends are certainly up ---- but the very short term may still have one more move to the dotted trend line. That lower red line is key resistance ----and the dotted line support.

Silver Mid Day Tuesday - Mar 15th

www.goldtrends.net

The second penetration of the lower red trend line in silver has opened the door to a potential test of the dotted trend line near the 33 dollar area. We've been watching the 36.50 area as key resistance for the past week --- and the Nuke situation in Japan was too much for markets to overcome. Key resistance is now the 34.90-35.60 area. Watch the dotted line near 33 as next key support.

Silver early Tuesday Asian Trade

www.goldtrends.net

The world markets are being rattled as the NUKE crisis expands on Tuesday morning in Asain trade. The chart shows silver is breaking below the channel line on an intra day basis. Resistance remains at 36.50-36.75 and needs a move above that area to neutralize this action. Support is the lower dotted trend line near 33 and last weeks low near 34 --- so say 33.80-34.20 and 32.60-33.05 area should the sell off accelerate. Until the Nuke situation calms --- anything can happen on Tuesday.

Silver Mid Day Thursday

www.goldtrends.net

In yesterday's blog we discussed that if silver could not get back above 36.50 ---and a break below 35.20 would keep the pullback in play. We discussed the 34.75 area as an important area that needed to hold --- and today's low at 34.70 ------where silver traded for only ONE MINUTE below 34.75 is close enough to make it a good call. For now ---as long as price holds that low today ----look for a bounce back above 35 --- and We'll see if that can hold in the Friday Asian session. We can see that today's test is only a test of the lower red channel line. As long as we hold 34.40-34.57 today --- a bounce into the close should be sustained as the market gears for the Saudi event tomorrow. WATCH THE AFTER HOURS New York market ----- that is where volumes are low ----and where shorts can attack.

Silver Mid Week Update - Wednesday

www.goldtrends.net

Our last post on the blog yesterday suggested that 35.50-36.50 would be a key going into Wednesday. As you can see by the chart --- that is the range so far today.

Silver has been trying to move above the 36.50 area ever since the Monday highs. We have now had three attempts at this area ----- and a showdown is due on the very short term. Each price print in that area has been met with selling -----and the volume (not shown but reported by trader Dan) has been lower on the climb. We can see where the Monday GAP up occured in spot ----and how the market has come back to this area. Thus the short term battle is in this one dollar price range. Support is 35.20-35.50 ------------any break of 35.20 would begin to favor that the pullback is not complete and breaks below 34.75 would add to that scenario.

Price is arriving at the apex of the triangle --- and a break one way or another is approaching. Until price breaks above the highs of Monday --- its best to be a bit cautious. The trend has not been broken yet on the short term --- but this area needs to be watched carefully.