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So, talks have begun regarding "tapering" at the Fed, China is supposedly in a slowdown, and the metals have been going up. For many viewing these facts, they may think that we are in a Bizzaro world of some kind. But, for those that follow this type of news and think that it actually matters for the direction of the metals, you must be the most confused people in the world.

Now, think about it, first you are expecting that the infusion of new QE-Infinity money will cause the metals to go to the moon, only to see the exact opposite occur, with the metals tanking. Then, you see announcements of the Fed's tapering and China's slow down, followed by the metals rising. You news followers must be the most confused people on the face of the earth at this point in time.

But, if you had heeded my words almost two years ago, you would have recognized that none of this really matters, as it does not determine the direction of the metals. Nothing has changed over the last two years, yet, many of you still think following the news will give you insight regarding the direction of the metals. In fact, as I have mentioned before, the definition of insanity is doing the same thing over and over, but expecting a different result. This makes all you news hounds truly insane. So, when will you finally come over to the "dark-side," and recognize what truly moves metals, and ignore the news? I know that is so counter-intuitive, or against your entire belief system, but, I follow no news whatsoever, and have done quite well with the metals over the last few years.

And, by the way, for all you "correlation" folks, I am seeing the US dollar setting up in a potentially very bullish posture that can take the DXY up towards at least the 86 region quite quickly, and maybe even as high as the 91 region. So, you can read into that what you will.

So, in forgetting the news, the question still stands as to what is silver going to do next. In our Trading Room at Elliottwavetrader.net, for the last three weeks, I have noted that the 20.60 level was primary resistance and my initial target for this rise in silver. Well, so far, silver hit a high of 20.58, and turned back down. Does that mean it has topped and will make a new low? I am as of yet uncertain, since I do not have a pattern giving me assurance of this. Therefore, I still remain open to silver attempting to break through this primary resistance level one more time.

So, as I said earlier this month, "based upon the action I am seeing in the market, it does not seem that sentiment in the metals has yet bottomed, unless it proves to me otherwise with a strong break out over 21.35 in the silver futures. Over 21.35, and I will be looking for at least the 23 region before I re-assess the action I see in the market."

Source: Silver: Breakout Or Breakdown?

Additional disclosure: I am long SLV LEAPS, with shorter term SLV puts as a hedge.