The Noisy Micro Price Action, Silver Technicals

So last week in this column we looked at the possibility of silver finally entering a trading range after a straight up May, and so far that’s exactly what’s happened. Silver hasn’t yet probed the $14.50 support area, but it has consolidated and bounced around 10-12% below its recent highs.

Of course, throughout history silver has proven to be quite volatile, and it’s actually scary to think of sizable $$$ coming into silver in a big way – how volatile and bullish the action would be. What would you rather own, a US Govt bond or the most important metal for the future of technology and advancement of science, that doubles as real money? I know my answer.

The key levels to watch in silver right now remain 14.50 and 16.50. Any meaningful break above or below those levels and watch out for a major, volatile move. Everything in between is the noisy micro price action that leaves hints as to which way the chart is going to go…watch it closely.

As the son of a stockbroker, I got into stocks during college, ultimately reading Jack Schwager’s ‘Market Wizards’ book senior year, which really opened my eyes to trading and investing in other asset classes. I worked on the Pacific Stock Exchange for most of the 1990’s as an assistant specialist and eventually a specialist. I developed a very contrarian trading style, searching out closed end funds and micro-cap stocks to trade. Trading for almost 20 years now, it wasn’t until Dec 07 that a friend turned me on to silver, after I queried him about gold’s prospects during the early months of the credit bubble bursting. The next month I made my first purchase of silver bullion, and have followed the silver market closely ever since. I am also a huge sports fan, and contribute to the website www.sportscity.com with a general sports blog (Speedburner on Sports), a tennis blog (Todd’s Tennis Takes), and NBA commentary (NBA Daily Awards).

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2 Comments to The Noisy Micro Price Action, Silver Technicals

1. 

   When you say a major, volatile move, are you saying that the price will head much higher once it reaches those levels? Or are you saying there will be a reactionary selloff and prices will drop?
GoldMarket Paul on June 18th, 2009
2. 

   The major move refers to staying in the trend – penetrating $16.50 meaningfully, then shooting up, or breaking below $14.50, and plummeting. Luckily, the $14 level has held up as stronger support…but if it’s violated (significantly, not just 2 or 3 cents), it could slip a buck or more. Now the key levels are $14 and $16.50.
Todd Robinson on June 18th, 2009