Speaking frankly, the silver 49er has had a tumultuous 27 months. The white metal is down 60.92% ($49.90 -> $19.50) in a little over two years. So what’s next? Are we basing at $19.50, or will we see another leg down to the 17.50 area? Will you be reading this article 3 months from now and kicking yourself for another 10% paper loss, or will we be in the midst of a V-shaped price recovery back to the 30 level?
Well, my gut is telling me that this is not what the bottom looks like. While there have been a few major short covering ticks the last few days, with price rocking from $19.20 to $20.20 in the span of an hour last Friday, the chop is still cutting downward.
The action is apathetically bearish, which means the spec pockets are ripe for the picking. Don’t think the aluminum suit on GS, JPM, and the London Metals Exchange will prevent the boys from sniping a buck off the price this Sunday afternoon at access open.
I think if there is a general market scare, a “flight to safety” from this cantankerous move will fling value right into the U.S. dollar. I would quantify this move as a -20% retreat on the S&P which would place us at 1350.80 from the current 1688.50 level.
But I have been wrong, and it sure would nice to have the metals rally a bit here. What do you think will happen, fellow stacker of the nether?