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.

Wednesday, March 11, 2009

Silver Short Position Continues to Look Good; March 11, 2009

Silver continues to fall in 5 waves and rallies in slow, choppy, overlapping waves. The MACD and stochastics are showing a bearish divergence at the tail end of this rally today and it's barely moves a few percentage points to the upside. Once this correction is complete, it will lead to very heavy selling. I remain short and I'm well into a very nice profit as I essentially nailed a top in this metal.

I also have a short gold position on as well. Gold's EWP structure is not as clear as silver's so I'm just posting silver.

As for the stock market, the rally that started yesterday should have some follow through in the next day or so. The market should charge toward the 770 area before meeting resistance and rolling back down to lower levels. We should see one more new low on the year before this big cycle of selling over the past 18 months ends. I have a very small long position on right now with a stop at the S&P 675 area. I will look to enter a strong short position if the opportunity presents itself.

Monday, March 9, 2009

Silver Moving Down as Expected; March 9, 2009

Silver and gold are moving lower as expected. Both have broke below their initial surge up peak, which creates an overlapping of waves, which means a correction. So whether they move higher or not, the rally from $12.79 is clearly a correction. I strongly feel that the declines in both the metals look impulsive so I expect them to move much lower in the very near future.

See the progress of the trade I'm tracking in the past few posts on the 1 hour silver mini futures chart above. My last short entry was at $13.31, near the peak at the 50% fibo retracement of $13.52. I will stop out at a new high just above $13.52.