Silver continues to disobey non-believers. International silver pushed up through 18 in early New York trading, we will have to see if it can stay there throughout the US trading day. And of course, this is on top of yesterday’s pop. Here’s the chart for SLV, the unleveraged ETF most US “regular people” use to trade silver on US markets.
(credit Fidelity.com)
For convenience, we drew a horizontal line at 15.50 (in SLV terms), right about where “everyone” said silver would hit serious resistance.
Well, it doesn’t look so serious now. Silver spent about 2 weeks just under that price before jumping up to a new range. And with yesterday’s pop, it looks like buyers are still in firm control.
When things start running up like this, your friendly Gold Enthusiast looks first at price, second at volume. All indicators, no matter how fancy or “derivative” or “predictive” they are, depend very heavily on price and volume. Right now silver is giving a strong showing in both of these – price is running up in a nice upward channel, and volume continues to be big on strong up-move days.
Of course, silver had a lot of making up to do. Not too long ago the gold-to-silver ratio was at all-time highs. With silver having run up 17% since then we may no longer be in that position, but there is still a long way to go before there’s any danger of silver becoming over-valued compared to gold.
This Gold Enthusiast thinks there is still time to get in on this silver market. If you want, wait for a pullback, then buy “some” but not “all” of what you’d want to have invested. Remember that markets go both ways, and more fortunes have been lost than gained by betting the farm. Position sizing is an important part of risk management, so keep a clear head and invest wisely!
Signed,
The Gold Enthusiast
DISCLAIMER: The author has no position in any mentioned security. The author is long the silver sector via small positions in AGQ, PAAS and SVBL. He may daytrade around these positions but has no intentions of trading out of these core positions in the next 72 hours.