Tuesday, March 6, 2007

Overhead supply - Silver

The threat to the success of any bounce here is obvious "overhead supply". The gap down on last Friday, March 2 was ugly to say the least. It will be a battle to fill it, let alone keep it closed. This overhead supply held by those who wished they'd gotten out sooner may weigh on the silver market for the next 5-9 trading days. Case in point: The December 18 gap down to finish the initial correction of silver at that time...the market rose tenatively to fill and attempt to close that gap only to roll over and retest the initial low set on the 18th. In three days we not only retested that low but established the low for the correction and the bounce on Jan 8, 2007 that established the most recent upleg in silver. Gaps on the way down are most always our nemisis on the way back up. That being said:

Daily Resistance: 12.95 / 13.10 / 13.54

Daily Support: 12.68 / 12.55 / 12.36

The uptrend line connecting the lows since the June low remains key, as does the nearby 200 Day MA

Good Read: http://www.kitco.com/ind/Laird/mar062007.html

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