MLR - Silver intermediate term tops

Published : April 25 2011 at 11:58 ET

Silver ETF SLV had five huge volume reversals since it started its run in late August 2010:

Oct 7, 2010 -2.95%

Nov 9, 2010 -3.57% 149.1 million shares, record volume

Dec 7, 2010 -4.85%

Mar 24, 2011 -0.96%

April 11, 2011 -1.63%


Each time, a huge volume spike occurred.

In all but the first case shown above, silver took a brief pause then moved higher again.

Today's volume is already exceeding 100 million shares only 2 hours into the trading day. Record volume exceeding 200 million shares is likely.

For the swashbucklers out there, 2-times inverse silver ETF ZSL could possibly be traded for a quick gain, but keep in mind, the volatility in ZSL is huge and not for the faint of heart.

Also, the fundamentals remain intact for silver to move higher after it takes a brief rest. China is supporting the US dollar as it is at critical levels but whenever central banks support a falling currency, that support is almost always short lived. Just ask Jim Rogers who's made fortunes by fading central bank movements. So the secular bull in precious metals is intact until something material changes. In the short run, a swing trade in ZSL is possible but handle with care.

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