Sunday, May 31, 2009

Commodity pullback?

Below is a weekly chart of SLV.

Click for larger, Browser back.

My friend KM makes a good point: Silver should be pulling back some. As we can see, last week's action totally blew through the Bollinger Band. This typically indicates a turning point. The decline should be swift, and result in one ore more red candles.

There is some support nearby, however, $14.00 looks like the first really strong line in the sand.
With my stop in place, I am guaranteed profit and if it does pull back, I'll re-buy with twice the position size.

Happy hunting.

1 comment:

  1. mike
    Silver has had the big monthly in over 20 years.
    Trading the commodity ETFs are more complicated and/or multifaceted. Meaning: In order to play an etf like SLV successfully, we must know what currencies, bonds and interest rates are doing.
    In my view, I expect further weakness in $USD, bonds and probable higher interest rates.
    Good for commodities, not good for the long haul.
    Thanks for the info.