Bearishness strongly reversed to the bull side in Silver minutes ago. Gold popped $5 above $1350. These are the signs bulls have been waiting for. After gold breached $1350 silver was pulled along even though it was more negative for the day compared to gold. This says, look to gold for silver's movements and this will be a weaker rally since silver isn't leading it
This set up targets in the $24 to high $25 region. $23.32 is going to be met easily.
The silver reversal was extremely strong. $22.589 is now the bottom and I'm 90% certain it will not be penetrated to the down side by more than a few pennies.
I was short $22.549 to 22.644 and I was stopped for $800 dollar loss, now I'm on the long side very heavily.
A number of possibilities:
(1) Today the close will be under$22.73 and $24.00 will be hit
(2) Today silver does not close under $22.73 which means mid $24.xx
(3) Most optimistic call would be for $25.72 regardless of how it closes today.
I'm going to have to back track. I said I'm 90% certain silver won't go under $22.589 by more than a few pennies.
I just scanned the news and Japan was hit by a massive earthquake with Tsunami warnings being issued. 7.3 richter. This throws a monkey wrench into my call.
Technically the numbers I use to take and get out of positions were met. Typically, I want those numbers executed independent of any news events, or fed speak or numbers being released. Did the algo's and market partcipants automatically just hit buy gold buttons on news of the disaster and as news trickles in folks start saying "it ain't so bad" then sell. This is something to watch into 4 pm.
So now, I'm about 70% confident $22.589 won't be breached by more than 5 cents to the downside. Technically, the machines look like they are set to cover positions and buy at the silver price I mentioned. Gold looks set to be bought/covered at 1351.90 and no lower.
If News is present, it screws with the validity of the signal. It becomes a flip of the coin when breaking news occurs during or at the time of the breakout. Now I'm sitting here with this sizable position long sweating because this is not not how the price typically behaves after a breakout.
Risk management says if the price doesn't close above $22.649 by 4pm cut the position to a third, stop out completely under $22.517, keep it and ride it all with a close above $22.843.
And, now the price is sitting (stuck) right at the $22.589 I've been writing about which means it's sitting on the fence.