july 2011 2012 silver

Click on this july 2011 2012 silver chart to enlarge

Compare the july 2011 2012 silver chart to the following 5 year chart.

Our 26 or 29 post made last week played out almost exactly as we had said it would.

Early in the first week of July 2012 silver started trading lower than the open and seemed to want to go to 26. Mid week the sentiment had shifted and silver buyers were moving the price which peaked at 28.5.

On Friday, July 6, all kinds of economic reports failed to prromote a stronger economy and the price of silver spiked back towards 26.

The 5 yr chart shows the potential upside should silver break through that bearish vertical channel which has big support and resistance level at the current price of 28. Then again at 31. The high of 48.48 set as the peak of the bull silver rally which broke above 20 in 2010 is a nice top to hope for if a bull silver rally comes to pass in the last part of 2012.

However!!!

A test below 26 would certainly make sense here since there are likely tons of stop orders that could be hunted out of play at that level.

However if the silver price does go below 26 then how are we to know that it isn't a genuine market sentiment and not just a stop hunting strategy ?

Again, from looking at the 5 year chart we see how deep a bear silver ratlly could go. There was a big range between 10 and 20 that lasted for several years and which was broken out of in July and August of 2010.

So basically we have been experiencing silver above 20 dollars US for 2 years alreadly.