Sell Signal In Silver?

Did price trigger an official sell signal in Silver this week?  Let’s view the weekly and daily charts for any clues.

Silver Weekly Chart:

We’re seeing possible resistance at these levels, which corresponds with an early 2007 high but not much else since then.  It’s close to a 50% Fibonacci retracement from the $21 peak to the $8 bottom, but not exactly.  Truncating the spike highs places the 50% retracement at $14.65 (to the low) while incorporating the spike high places it at $14.92 (both down tot he spike low in October 2008).

Anyway, there may be support via the moving averages, but it looks like odds favor some sort of pullback/retracement/reversal in silver (and gold) prices.  Let’s drop to the daily chart.

Silver Daily Chart:

What got me interested in looking at this further was the breaking both of the steeply rising trendline on the daily chart as well as the Arc (red) from the Rounded Reversal (which has played itself out perhaps).

Price is above all key moving averages and is in a confirmed uptrend, so any short at this level would be counter-trend (on the daily chart but in the direction of the weekly trend), but perhaps buyers might be tempted to take well-deserved profits at these levels which could add further downside momentum.

The momentum oscillator isn’t giving us any clues, other than the black line (3/10) broke beneath the Red Line (trend line) giving a sort-of aggressive signal.

Price formed a doji at the $14.50 level prior to the reversal, and the large down day (candle) Tuesday is a sell-signal.

Let’s keep an eye on silver and gold for clues of additional downside momentum, and as to whether this retracement is a simple pullback buying opportunity… or something more ominous.

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