The consolidation in precious metals continues, with a rather disappointing pull back in silver after the stunning rise up to the next resistance level.
However, it has pulled back to the previous resistance line which it is now using as support so expect a bounce and another assault on $17.22 in the coming days.
The dollar still remains in a strong downward trend channel despite it's gains in recent weeks. There is still nothing good about this chart. The interim strength in the dollar will likely be replaced by another smashing probably starting in the next few days.
The Dow also looks week and is resuming it's down trend. It broke slightly above it's previous down trend from the all time high before correcting back down again forming a new trend line. This looks roughly to me like a bearish diamond formation although it doesn't meet all the criteria. Whatever this pattern is, it seems that the Dow has broken free of it to the downside. Perhaps it is meaningless but from what I can see; buyers are weaker than sellers at the moment which is causing small bounces and bigger sell offs.
Nothing has therefore changed from my previous posts. The metals still look strong despite continued consolidation but the dollar and markets are painting a very bleak picture. The longer the PM consolidation continues the stronger the upward move will be should it break to the upside. PM investors will therefore have to bite our nails a little bit longer.
For disclosure, I'm not a professional financial advisor and this is not investment advice, merely my own observations of the market and indexes, so do your own research.
