Updated Weekly View of Targets for Silver

Nov 10, 2009: 11:28 AM CST

Since my last post on Silver Prices on October 5th, Silver prices have achieved the $18.00 per ounce price target and have hovered underneath that resistance level since then.  Let’s take a quick look at silver prices and make a note as to how silver is failing to match the recent highs in gold.

Look back to my prior October 5th post entitled “Advanced Fibonacci Confluence Projection in SLV Silver ETF” not only to see the prior analysis which targeted $18.00 as a key level to play for and then find potential resistance, but also for the dominant confluence Fibonacci Projections that led to that level (a brief lesson in advanced Fibonacci methods).

I wrote, “All four Fibonacci tools reveal confluence at the $18.00 per share level, which is above price currently.  This makes it both a potential “scalp” target to play for, and also a possible low-risk, high probability short-sell trade if this level does hold as “Confluence Resistance”.”

Silver has yet to overcome the $18.00 level, so any break above this zone would be very significant and very bullish both for Silver and Gold.

A slight negative momentum divergence has formed at the $18.00 level, which is a bearish non-confirmation of the higher prices at potential resistance.

Given that prices have ‘bumped up’ against this level over the last few weeks, this level could be ripe for the breaking which would lead to long (buy) entry opportunities.  Otherwise, if this level continues to hold as resistance, it would be a potential bearish omen for both silver and gold.  Thus we need to watch it closely in the coming weeks.

I mentioned that Silver was not ‘keeping pace’ with Gold prices, so let’s see a simple chart of gold and how Silver remains well-below its early 2008 peak while gold has soared to new price highs above $1,100.

Gold is well-above its $1,000 peak in 2008 and early 2009, though it also is forming a slight negative momentum divergence.

Rather than analyze gold here (I chart monthly, weekly, and daily analysis on gold for subscribers to the Weekly Intermarket Membership service), I wanted to compare gold prices to silver, and highlight the interesting non-confirmation.

I think this is in part due to gold’s status as a ‘reserve currency’ amid inflation fears and a falling US Dollar, which isn’t necessarily the case with Silver as both a precious and industrial metal.

Let’s keep watching to see if silver prices can breach $18.00 per ounce and how that development would play out for the short-term future of both silver and gold.

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter:  http://twitter.com/afraidtotrade

5 Comments

5 Responses to “Updated Weekly View of Targets for Silver”

  1. terlyn Says:

    In fact SLV now at 16.95.

  2. terlyn Says:

    But GLD also down.

  3. Dan de Man Says:

    Thanks for the article Corey!

    It looks like SLV will test last weeks low of $15.82 for buyers before we can challenge $18. Anyway you have it SLV has been a swing traders playground for the last few months. Got to love it.

    Gold has had 3 pushes since the beginning of Sept. It maybe time for a rest.

  4. tradingsites Says:

    Thanks for the article Corey. Its very informative especially to noob like me.

  5. tradingsites Says:

    Thanks for the article Corey. Its very informative especially to noob like me.