Rambus has put out a few charts showing that SIL and the gold indexes are at a critical juncture with its present testing of the lower trend line. I would agree, its right at the critical point. Virtually all the analysis I read around here is trend line and pattern based mostly off of the price action only. I have tried to draw in market internals attempting to discern additional clues. Let’s take a look at silver. Its not over until its over and may resume its advance soon after completing this pullback phase. Here is some of the reasoning for this. First is the 2 hour which has put in a nice back test to its triangle. Beyond the easy to see price action what I like here is the volume characteristics. Note the strong volume on the two advances that is about 3X times the declining volume. That’s very positive action, then it proceeded to dry up on the pull back. This is pretty classic knights. Next notice the stochastic basing out on this pullback.
Now lets look at Plunger’s 30 Week EMA “tool”. This has come to be my most important chart as it enables one to filter out the non-players immediately. This is not a full blown bullish chart as we want the price to be over the 30 EMA and the EMA should ALWAYS be flat to rising. So we have the flat part, but the price does rest underneath, so it is on thin ice partially broken through. The OBV, however allows us to possibly make an exception if next week the price can quickly get back over the 30 EMA…I also like the volume as one can see it was cut in half on the pullback.
An initial rally in the gold sector should have silver leading gold at first. That is what we have had and the pullback over the past week was just that, a retracement (so far). Note the 30 EMA still configured upward and price is above
Now onto some of my favorites. First THE favorite is MAG Silver. Note the weekly and daily chart and its characteristics. Remember our rules… price over the 30 EMA and the EMA is flat to trending up. Also note the volume characteristics of at least double the volume going up & half the volume going down. The weekly has nice stochastics and decent OBV. Also 30 EMA is trending up with price over.
And some of the other runner ups