Wednesday, 11 May 2011

Silver $22.77 target? I hope not! 2011-05-11 22:02 BST

Silver $22.77 target? I hope not!

I saw gold and silver both slowing down in their rally yesterday (Tuesday).

Gold was approaching very near its 50% retracement of the downmove, at $1520.19 on my chart and silver near a 38.2% Fibonacci retracement of its down move, at $39.44. Both looking a bit toppy. Interestingly, these Fib levels were also support and resistance where short-lived trading ranges occured in gold and silver on 5th May 2011 in the morning. I fancied going short on a spreadbet but didn’t want to gamble really.

Gold went just beyond the 50% Fib target to 1528 and silver turned almost exactly on its 38.2% Fib target at $39.52 intraday, within 8 cents. Now it's Wednesday and both have turned down from these points.

I asked Al and Roger Wiegand if they thought silver is going below the $33 low to form a big A-B-C correction? A 38.2% upside retracement of the $49.75 to $33 crash is very stingy, nowhere near enough to form a nice bullish flag. An equal sized downleg of $16.75 would take the price from this interim high of $39.52 to $22.77 if that occurred!

This comment was posted by me earlier today at:

Here are my CMC markets trading screens. Both prices are nearly at Fibonacci levels that are also prices that were trading sideways going into 5th May during the crashes:


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