Thursday, March 30, 2006

Silver



Here is an hourly chart of pit trading in May silver futures. Above that chart you will also see a monthly chart of silver futures trading going back to 1989.

I had been expecting a long term top in silver near the 1/2 point (950) of the second box up from the 351 low in 1999. But the market has proven much stronger than I was expecting. Today it actually has moved a bit above the top of the second long term box (at 1150) and traded as high as 1171.

I think the top of the second box at 1150 is going to be strong long term resistance and that the next big move will carry the market down to the 1/2 point of the box (950) or even to the bottom of the box (750). Meantime there is resistance above the market at the 3 3/8 multiple of the 351 low at 1185. Since the market has yet to start producing shorter swings within the move up from 915 I think it will probably hit 1205 before any break begins.

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