Dissecting the March11 Silver Chart

As you know by now, I am not a believer in technical analysis as it pertains to the current situation in gold and silver. However, because so many traders and computers are intent on making short-term buy/sell decisions based upon chart position, a simple chart review can give you a pretty good idea of where the EE and traders alike will act.
With that in mind, dear reader, behold this fine-looking chart for moment. It is a 3-hour, March11 silver.

Let us dissect points 1-6 for clues as to what lies ahead.

1) This is the peak from three weeks ago today, $29.40 on the March11 contract.
2) Rather predictably, a short 36 hours later, silver had rebounded almost exactly 50% to 28.24
3) The selloff wasn't over, though, as silver double-bottomed very nicely on 11/16 and 11/17 at 25.05 and 25.10, respectively.
4) On its way back up now, silver moves decisively back through $26.50 on 11/18 and then, importantly, tests that level as support on 11/19.
5) 26.50 held which set up a run back toward the critical point #2 of 28.24. It almost made 28 on 11/22 before a frightened and scared Blythe took action and tried to shove it back. She almost succeeded. Note how silver traded back to the critical 26.50 level (see point #4) three times on 11/26, 11/28 and 11/29 and, three times, support held. This is why I was so encouraged by the action yesterday.
6) Brings us to today. Not surprisingly, March11 silver hit 28.39 (see point #1) before being shoved back. As I type, it stands at 28.06.

So, what can we expect next. Since we did traded through but did not close above 28.24, I'd expect a bit of short-term consolidation between the high of today and, maybe 27.80 on the downside. The consolidation will probably last into and through tomorrow. It doesn't necessarily have to; it may just keep on rolling. However, since we couldn't close above 28.24, a "breather" is likely before the test of the old highs.

But, don't worry. That test of 29.40 is coming. It is, most definitely, coming later this week. Just like the $26B in POMO that is most definitely coming later this week. And, yes, the two are related.

I hope that helps. I'll try to add another post later this evening, after we've all heard from Harvey.