Silver, after being taken out to the woodshed in the previous five trading days (down 29%) is up today, up a whopping 69 cents an ounce, or 2%.
Is this, perhaps, the beginning of silver's run back up to test resistance at $50?
Highly unlikely. They say that if you drop a cat off a 50-story building you get a bit of a bounce at the bottom when it stops going down. But silver's mostly sideways move today seems less of a "dead cat bounce" and more like it kind of hit a ledge on the 25th story and is perhaps catching a little breeze, the net result of which is to "simulate" upward movement for the time being.
If the bulls had any conviction at all, they would be powering silver back up to at least $40 so we could all go short again. But they can't even move it a buck.
In the eyes of this investor, silver remains a short until either 1) the valuation is truly compelling, e.g. $25 an ounce, or 2) the bulls show some signs of staging a counter-trend (or counter-crash) rally. Neither of those conditions has yet been met.
Hi-yo Silver, away!
Disclosure: I am short SLV.
Additional disclosure: I own physical silver and am long Jul 35 puts on SLV.