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Silver Headed for a Correction. Taking profits

Jan. 16, 2011 2:00 PM ET
mrgrape profile picture
mrgrape's Blog
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As a long term believer in the fundamentals of silver, I hate to take profits here but I don't like to be greedy or just plain stupid. I will probably be going long on silver throughout my lifetime...but for the short term I think taking profits is a good idea.
I can guarentee you one thing that if prices correct at all suddenly to the downside...any retail investors will get shaken out..

Bearish Reasons:
1. Distribution selling since November with high volume.
2. Top of the current rally was on January 3rd. Marked by a trendline resistance that has always made silver sell off.
3. Silver/Gold Ratio trendline broken that held from August.

Bullish Reasons:
1.This rally was different from the other silver rallies in which we did not spike up to the resistance trendline. We slowly climbed and also didn't sell off dramatically once we touched it. We could possibly correct and then break that trendline in which we see a monster rally.
2. Long term MA's are still bullish while the short term is signaling a short term correction.

Disclosure: I am long C, DIS, AAPL, LVS.

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