The Entry Point
Today’s selloff in gold and especially silver is a great trading opportunity. Given the action (or lack therewith) of Hecla on Friday, where despite silver trading up strongly, Hecla went nowhere, I am not surprised that silver was down today. I believe, based on the chart, the recent trading activity and symmetry, that there is a very good chance that silver could reach $22.50 or just above, by this Friday’s close. Look at the 3 month chart and you will see that silver fell from $22.50 on June 6th to it’s low of $18 on July 14th, a total of 26 trading days. This Friday Aug. 19 will be 26 trading days from that July 14th low. The 200 day mvg. avg. is currently at $22.79, a target for silver this week. Anywhere between $22.50 up to the 200 day is quite possible. The 50 day is at $20.25 and today silver traded down below it. Perfect entry point for the metal and silver miners. Watch Hecla the rest of the week. If after this drop, it starts to show strength ahead of silver itself, that will be the tell that my outlook is on track. We have this whole week to see a recovery and upside breakout. Of course, if you trade options or other leveraged vehicles there is risk if you don’t allow yourself more time for the upside target to be reached beyond this Friday’s suggested timeframe. That is because while $22-$22.50 is possible by Friday based on symmetry, it is a longshot and there is a developing inverse H&S pattern that may take until late next week to complete. I am speculating on the former but ready to add next week if the latter turns out to be the case.