Saturday, March 14, 2009

Silver/Gold Short Running Out of Room and Time to Decline; March 14, 2009

Above is an updated 1hr silver mini futurs chart. The rally needs to end soon, and judging by the MACD and stochastics, that should happen soon and lead to a major selloff. $13.53 in silver and $945 are crucial levels, however even if they're only slightly broken we could still count the entire rally as a "flat correction". However it can only be a slight break in my view. I cut back on half my shorts to lock in some very mild profits and will reshort ONLY when I see weakness again.

The stock market rally is in its final stages. 804 in the S&P is the make or break point as it's the end of wave 1 and cannot be exceeded. I will exit my long positions between 770-780 and will begin to short again with stop above the 800 level. To make a nice 5 waves down over the past few weeks we need one more new low on the year. I'll position myself for that with stops at the 805-810 levels.

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