Silver Market Update

January 22, 2007 10:00am

Timothy Silvers

            I received a few emails asking whether silver was done correcting or not. I worked 80 hours this week at my "real" job as an IT Manager doing a SQL Server database conversion and have not had much time to write or analyze the markets. Looking at the charts, it appears that we are at a transitional point in the short term. Silver will either break resistance of $13 and continue higher or correct off this resistance back down to the $12.00-$12.50 range. Prices below $12 are looking less and less likely. However, the commercial traders are still short over 50,000 contracts so they could push the trading funds into liquidation in quick sharp selloff. More dollar strength or a retest of the lows in oil or other commodities could trigger that. The reduction in the commercial short position is what I have been waiting for to get into a trading position. However, last year at this time the commercials were short fairly heavily during most of silver's price advance. It could happen again, so I'm keeping an eye on that.

            Bottom line: closes above $13 for three days in a row should indicate higher prices short term. Failure to do so should mean a retest of the lows near the 200 day MA of $12.25. That's what I'm hoping for. Be careful not to get too highly leveraged in your trading. It will be volatile and could wipe out gains even if it eventually goes the direction you think. That's all I have for now.

 

God Bless,

Timothy Silvers

 

Disclaimer: This article represents the opinions and personal views of Timothy Silvers and is not intended to be investment advice. If you choose to use this analysis for your personal trading, Timothy Silvers assumes no liability for the direct or indirect losses you may incur due to using this article to make your investment decisions. You are totally and completely responsible for your own investments. At any given time, Timothy Silvers or his friends and relatives may have positions in silver related investments that may or may not follow the recommendations contained in this article. The information in this article may not be completely correct and accurate. Even though Timothy Silvers has done his best to review the content and accuracy of this article, he is in no way liable or responsible for any mistakes or omissions.