(click for a larger and clearer image)
I don’t think it’s fair to the word “down” that everyone uses the term “update.” So from now on, when I write about downside risk, I’m going to use the term “downdate.”
The trendline that started in late January passes under today’s settlement at $41 and the one that began in mid-March at $43. I’ve put tow red arrows there only, because I don’t like to junk up my charts. There is plenty of room between today’s settlement and either of the trendlines for silver to trade within and STILL be in an uptrend.
I don’t think anyone is going to be buying there is silver is going to test the trendlines. The pros will wait for the bounce and trade off the reversal and most likely place their protective sell stops below the trendline.
Silver put in a high of $49.82 on 4/25 and yesterday’s intraday high was $49.52. Pros are going to be watching to see if silver rallies enough to take out either of those highs, especially the $49.82 on size and that it sticks there.
Let me say that again in English: Pros are going to be watching the price action to see if silver takes out the highs of this week on strong volume and closes in a range that would suggest a new high at settlement.
If that becomes the case coming into the close, I wouldn’t be surprised if traders added length to their portfolios and took it home with them over the weekend.
Something I’ve found to be quite confusing: A couple of moths ago, the exchanges decided to have TWO different settlement prices for silver and gold. One settlement is based on the PIT close and one settlement is based on the all-session (electronic) close. Now when someone inquires about whether silver is up or down down on the day I have to ask, “Based on the pit close or based on the all-session close?” God bless COMEX for making it even more confusing to the average trader…