Silver Wakes Up

Silver definitely woke up yesterday. This morning it is up even further. I expect the dollar to continue to fall precipitously which should elevate silver and gold. Here's a chart:

Here's SLV (the ETF that holds silver) with channels drawn in. This was a very strong channel until recently. I felt that silver had support until it dropped below the lower trend line and then I wasn't so sure. Now I believe that the trend is back on.

It's always a marvel when a trend line intersects with a popular moving average, in this case the 50 day. Notice how during the silver crash the market gapped over the spot where the 50 day and trend line intersect. It then bounced briefly back to that point but returned to the lower trend line. Now under the 50 day it followed that path right to the point where the 50 day intersected with the lower trend line. Again, yesterday it gapped past that intersection point.

So now I believe that the upper channel marks the resistance line. I don't expect another parabolic rise so I can't exactly see how silver gets much further than 42. Still, that's a pretty nice potentially quick return.

I believe that if silver retraces to the bottom trend line that it is a gift. The market is often generous to the observant with second and sometimes third chances. Momentum is so strong right now though that this may end up becoming a bona fide runaway gap.