Silver: Weakening momentum.

The price of silver seems to be consolidating as the initial rebound off recent lows loses momentum. This is quite obvious as the MACD formed a lower high in negative territory and seems ready to form a negative crossover with the signal line. The fact that the MFI has turned down at the 50% line reinforced the picture of weakening momentum.

In light of this development, I am keeping an eye on the 100dMA which is at US$35.44 an ounce now. In the event that this support is breached, we could well see the long term support provided by the 200dMA tested. If the 100dMA should hold up decisively, we could see the flatlined 50dMA tested as resistance next. This is at US$ 39.26 an ounce currently.

What am I doing? Nothing for now. I would like to buy more silver when the signs are more reassuring. Currently, the situation is somewhat dicey. For anyone who would buy at the 100dMA if it should be tested, he would be betting that the support would hold and if it should hold, not only could the 50dMA be tested as resistance, we might see it even broken as, potentially, we have a reverse head and shoulders pattern on hand. Notice that I said "bet" because that is what it is.

For me, I would like to see a positive divergence formed between price and the MACD, that is a lower low in price and a higher low in the MACD. This would give me greater confidence to add to my long position in silver although it would still be a "bet" but a bet with a greater probability of success. TA is, after all, about probability and not certainty. Good luck.