Silver bears may be pausing for breath

[For the complete and illustrated version of this and future Updates be sure to sign up at www.sevendaysahead.com] The fall in Silver from the July high has been impressive. Some supports have failed, but now one particular key area is trying to hold, implying scope for a corrective bounce. At the same time Gold has reached potentially interesting support too. The Commodity Trader’s view: WEEKLY CHART – SEP-08: On the weekly chart of the front month first note how the bear channel base projection failed to provide support. HOWEVER, in the Commodity Trading Guide we had noted key support from the 14.25/10 area, which included 76.4% and the 1.618 swing target off prior 16.19-19.55 upmove. Within this also lies the 14.17 Dec-07 low. Technically this would be a logical place for a rebound. DAILY CHART – SEP-08: At this stage we view any s/term recovery with suspicion – there is a good chance that it will be short-lived, and the precursor to another slip. In this regard we do not anticipate a deep (e.g. 76.4%) rebound, and would look closely at the 16.19/60 area (May low and rising old support/return line) for resistance. Sellers on rallies into this area should favour stops comfortably above here. Philip Allwright Mark Sturdy Seven Days Ahead [For the complete and illustrated version of this and future Updates be sure to sign up at www.sevendaysahead.com]