Two of my recent blogs on silver stated:
"...gold and silver could be volatile this week (1/27) so prices could be making significant moves up or down, or both."
"...I have been avoiding buying silver as it seems more vulnerable to a deeper short-term correction. '' (1/28),
This correction seems to be happening now as silver prices dropped significantly today with the spot price nearly touching $19 and closing around $19.20. This is right at the price level I suggested yesterday as an ideal buy spot. During today's drop, however, a major bearish signal appeared in the silver charts making directional momentum now 100% bearish for this metal. While we still could see a bottom form over the next several trading days (possibly below $19), I am going to continue to exercise caution here and avoid any buying until momentum shifts back to at least partially bullish. Gold did not fall as much today and closed around $1245. Silver is now making a new multi- week low while gold is not, so we could be seeing a case of intermarket bullish divergence here which supports the argument for a strong reversal (this would be invalidated if gold starts to fall below $1200). Still on the sidelines of both silver and gold and waiting to buy.
Crude oil prices have been rising into this week's reversal zone and have so far remained below $100. This could be an ideal time to sell this market short, but, in a situation similar to that described above for silver, a strong bullish signal appeared in the crude oil charts today which makes the directional momentum for crude now mixed bullish and bearish (it had been 100% bearish). This makes me uncomfortable with any short selling for the moment. This market could be turning bullish. As I've mentioned in recent blogs, the cycle picture for crude oil is also a bit unclear, so it is best to remain on the sidelines for now. Currently out of this market.