First and foremost my humble apologies for not posting last week, as I was on the road.
So where were we leading into last week's sell off?
Silver had been in a DOWNTREND. A downtrend is defined as a series of LOWER LOWS and LOWER HIGHS.
Silver had also been in an ever narrowing range, with lower end trending around $22.50 per ounce. The range broke to the downside in a power move to hit a LOW of $20.85 per ounce.
Technically, silver remains in a DOWNTREND, but of note silver has rallied quickly back into the range.
I am personally keeping an eye out for three possible scenarios for clues in the silver market.
First scenario, remembering that the "trend" is you friend, and that the trend is currently down, the current silver rally stalls without taking out the prior HIGH of $24.05 and begins another leg to the DOWNSIDE.
Second scenario, silver pulls back to the previous support line of around $22.50 and bounces hard off that support. In this scenario, last week's breakout to the downside would be a "false breakout" followed by a strong rally to the upside.
Third scenario is silver takes out the prior HIGH and negates the DOWNTREND to resume a NEUTRAL in the COMEX silver market.
Stacking silver is so much easier than trading this market.
Peace Out and Stack On!
