New Upleg for Silver
by Mike Paulenoff, www.MPTrader.com
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Silver and the iShares Silver Trust (SLV) have been higher and outperforming gold by a wide margin. This largely has been because of the weaker US dollar, the surge in China equities, and the perception that the Fed must inflate and monetize to avert another bout of deflation all combined to create a bit of perfect storm for the "poor man's gold."
From a technical perspective let's notice that the SLV has hurdled key near-term resistance at 17.75 and 17.88 and is probing important resistance at 18.12/15 as well. The pattern carved out within the upleg from last week's low at 16.96 into Monday's high at 18.18 (and today's high at 18.21) exhibits bullish form, which "warns" us to expect additional strength in the SLV into the 18.45/60 area, which also happens to represent the May-Aug resistance line.
At this juncture, my near and intermediate-term work indicates that a significant correction ended last Wed at 16.96 and that a new upleg has just started.
