Silver and Natural Gas Update

Last week I shared two charts which caught my eye, silver and natural gas.  Silver had a wild ride last week after, breaking above the 10 month downward sloping trendline on Tuesday. This move looked to be a bullish signal, but the metal broke down strong on Wednesday after testimony from Ben Bernanke led many traders to believe further Federal Reserve monetary stimulus was not imminent.

As Peter Brandt noted, the silver market saw its second highest weekly volume since April.  The fact that the volume surge happened in conjunction with a downward price move could be a warning sign for longs.  The 38.2% fibonacci price level is also worth watching at $35.16. The silver market closed below this level Friday, reversing the move earlier in the week above this level:

Natural Gas drifted lower last week, continuing the long-term negative trend. It had been forming a short-term symmetrical triangle and last week’s finish looked to be a break below that short term triangle in addition to a break below the longer term down channel:

In my market readings for this weekend I posted an article from The Reformed Broker on the potential Trade of the Year.  The long and short-term trend is still negative for Natural Gas, but the author analyzes the potential for an eventual reversal in Natural Gas.  For now patience is warranted before any potential long position; meanwhile, shorts have seemingly had nothing significant to fear for months…