$SLV continues to consolidate below 34 As mention
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$SLV continues to consolidate below 34
As mentioned before, I am waiting for a higher move in SLV before entering a short position. The first hit of 34 had a good pullback to the 20 DMA but since then it popped off of that support level and continues to consolidate.
This tight range bound trading in between 34 resistance and 20 DMA support has made for excellent day trading, however the danger of a gap up still outweighs the benefit of a gap down. The stock is still in an uptrend trading above the daily moving averages which are showing strength with the 20 DMA above the 50 DMA which just recently crossed the 200 DMA.
If you look slightly above at the 36 level you will see that it was that vicinity that saw huge moves to the downside going back to September of last year. We have a gap window from 2011, and a pivot high with a huge reversal candle in late February. We also have some gaps at 35.
Silver is essentially a play on the dollar, and the powers that be are wrecking the dollar to keep the markets inflated ahead of the elections. That is why it is very dangerous to be early on a short position, especially if you are using options. One big spike and a week or so of sideways trading going into options expiration, and you get crushed on implied volatility and time value.
[IMG]http://i.imgur.com/GyCdg.png[/IMG]
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