All I know is that I shorted silver on Monday, ZSL. I heard all kinds talk about silver and commodities freaking everyone out from CNBC to the blogosphere and twitter.
Now, first of all, let me be perfectly clear in that the proceeds from ZSL countered the total error of buying GLUU at absolute tops. A mistake that I’m still savoring as I hold GLUU over the weekend and wonder which way it’s eventually going to go.
But I’m out ZSL and looking at the pretty yellow candle indicators appearing at the far right of my ProphetCharts… telling me silver daily just gave us a Bullish Harami. Even the ZSL short produced a Bearish Harami. Meanwhile, everyone from CNBC to the blogosphere and twitter are talking about buying silver already, and “falling knife” has gone up on the Google Trends’ search records. I want to believe, but I’m always cautious when so many people already see the same thing. Let’s look at the chart:
This weekly chart removed the Harami that appeared after Thursday and Friday. But on to the technicals: touching off the 21-weekly MA and 38.2% retracement. SLV is also bouncing off a good support line from the March lows.
This looks like a good place to pause, but I really wonder if the precious metals are done for now. I think SLV will go back up again before it makes another significant correction, but I won’t bet either way until I see definite trend. I just follow the patterns, and my limited experience tells me that a few knife-catchers are going to get churned-out in a period of range-based trading.
Be careful to jump into those commodities that fell so far last week, don’t try to call a bottom. Make sure you see a trend before getting on board. Good luck, and stay thirsty my friends!
