Silver has been an interesting metal as of late, with the massive sell off after the Hunt bros. failed attempt in the spring this year to corner the market, to the strange consolidation for the last two months. After making a parabolic run to $50, the metal sold back in a jiffy to $33.55 per oz. which was the 50% fib of the major upswing from $17.50 - $50 which was the all-time high. In a peregrine falcon dive over 5 days, it stopped on a dime at this fib only to bounce to the sub $40 mark. From here it sold off aggressively again to where...the same 50% fib level. Bounces lately off this level have been shallow and it keeps producing more protracted highs but after testing it for a few days last week, it has held again following up with some decent buying today along with closing above the 20ema. Its possible this could be the start of a decent run, but we have the 38.2% fib along with all the price action rejections above sub 40 so watch to see how price reacts to these levels. If it can take these out, the we should see some further advances towards the all-time highs printed two months ago.
Also, if it fails to break $39 and meanders back down to the 50% fib, look for a good buying opportunity here with tight stops below the May 2011 low.