Wednesday, August 25, 2010

Last Chance For Silver To Fall

I have been frustratingly short the SLV since May based on the above wave count. Silver has had other ideas about breaking down, but the pattern has yet to be invalidated. A move above the wave 2 high of 19.46 (green line) would almost certainly mean that something else is going on. If silver is going to break down, it should do so in the next 1 to 3 days. A turn down from current levels would maintain the pattern of lower highs, and a break of the July low would likely send silver below the February low of 14.65.

Sometimes it takes a while for a pattern to resolve in the expected direction. As long as a pattern remains valid there is rarely a good reason to exit a trade.

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