Patrick MontesDeOca: The general consensus among technical analysts is that the silver market is making some kind of a bottom at the current price range of 28 to 28.50, and some are calling for lower levels into the 25 to 26 area.
All the work done by the Equity Management Academy’s research indicates the contrary is about to happen. The cycle work provided by EMA indicates that if this expected move is going to happen, it is going to happen NOW. The highs of this leg to is expected to come in towards the latter part of April early May of this year. I have highlighted the reasons for this potential move on a recent report published in Seeking Alpha.
The general sentiment by Eric Sprott and Rick Rule (Sprott Asset Management) and David Morgan, supports fundamentally and technically this market currently can substantiate and validate a very aggressive move to the upside near-term.
If all of the above consensus indicate an up move in silver prices short-term is coming, it does not bode well for derivatives such as the ProShares UltraShort Silver ETF (NYSEARCA:ZSL).
It appears the highs were made in the 55 to 56 target zones a few weeks ago. A close below 52 next week would put into perspective the lower targets of 47 to 45. A close below the 45 level can bring this market down all the way under 40.
Let’s take a look at the technical picture for next week and see what live trading opportunities we can identify.
The ProShares ETF contract closed at 53.05. The market closing below the 9 MA (53.61) is confirmation that the trend momentum is bearish. A close above the 9 MA would negate the short-term trend to neutral. With the market closing below the VC Weekly Price Momentum Indicator of 53.34, it confirms that the price momentum is bearish. Look to take some profits, if long, as we reach the 54.78 and 56.15 levels during the week. Buy corrections at the 51.61 to 50.17 levels to cover shorts and go long on a weekly reversal stop. If long, use the 50.17 level as a SCO/GTC (Stop Close Only).