Since last week's post the silver "rally" stalled out while also failing to take out the prior HIGH.
Silver remains in a DOWNTREND.
A downtrend is defined as a series of LOWER HIGHS and LOWER LOWS.
Last week I mentioned three possible scenarios for the silver market.
The first scenario was for silver to take out the prior HIGH and negate the DOWNTREND and return to NEUTRAL.
The second was for silver to pullback to the prior support around $22.50, establish a HIGHER LOW and rally hard above the prior HIGH.
On the hourly chart below you can see where silver dropped to today's low of $22.57 and then bounced hard off this level.
That is some nice action and confirms that the $22.50 level is still alive and is acting like a hot wire.
If silver can establish a "HIGHER LOW" around this area and rally to take out the prior HIGH around $23.90 then not only is the DOWNTREND negated but a new UPTREND will be established.
Conversely if this area fails and silver falls below this mark, then expect a continuation of the DOWNTREND.
Remember the Trend is Your Friend until the End.
source: JM Bullion
The premiums on American Silver Eagles have come down substantially from earlier this year and Eagles can be had for under $30!
Peace out and stack on!
