We had the first 2009 down day on the market today. But SLW held on to its support level and the last few minutes saw some heavy buying. So I'm taking a small position in SLW to test the water. I will keep a tight stop on this trade as my indicators are showing further downside.
In other words, the short term price action looked positive today but my indicators are showing a negative move for the intermediate term.
[caption id="attachment_1010" align="aligncenter" width="500" caption="Silver Wheaton"][/caption]
[caption id="attachment_1011" align="aligncenter" width="500" caption="Silver Wheaton"][/caption]
Furthermore, silver prices seem to be edging higher. We just tested the 20 day MA again. Lately, silver has been gliding along its 20 day MA. But we saw significant volume today on this test of support, so there's a good chance we might break down from here. That's another reason why I'm keeping a tight stop on this trade.
[caption id="attachment_1012" align="aligncenter" width="500" caption="Silver"][/caption]
Upside: Tested 20 day MA. Good last few minute up trades. Both 20-day and 50-day MA are positive.
Downside: Indicators show intermediate-term weakness. Possible double top with negative divergence.
Support: \$5.50. (This will be my mental stop for this trade.)
Bottom line: I'm adding a small long position here to balance my portfolio. As of this writing, I am net neutral with my portfolio. The idea is to have both feet in the water and then add to strength as the market unfolds.