Weldon's Money Monitor: Silver's Launching Pad Pattern, or Crash Landing??
...we are cautious amid intensifying technical divergences...
We note the short-term technical picture in Silver, as defined by the 120-minute close-only chart of Spot Silver, and observe the following factors:
- POSITIVE: Our own famed 'Launching Pad Pattern' is evident, defined by a rising right-side trend-line and flat top, similar to the 'gentry' that holds a rocket in place prior to its 'lift-off.'
- NEGATIVE: The flat top that defines the ignition pivot as per our Launching Pad Pattern also defines a potential triple top pattern.
A move above $9.26 is bullish, as this would 'key' an ignition and lift-off via our Launching Pad Pattern, while a move back below $8.76 would be negative and open the door for a test of the trendline and the longer-term pivot-point just below $8.30.
On the negative side, we note new 'lows' in the COMEX Calendar Spreads, the failure of the Gold-Silver Ratio to break the uptrend line in place since the 1Q of 2004 and the continued push higher in Asian currencies led by the Korean Won and Chinese Yuan.
Indeed, while the macro-secular landscape continues to provide a fertile feeding ground for bullion bulls, we are cautious amid intensifying technical divergences and a severely overbought condition in mining shares.
The Bottom Line: We remain bullish on bullion, but are suffering from a case of 'High Anxiety' this morning.
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