Technicals | Nov 11 2011
By Rudi Filapek-Vandyck
Everybody loves silver, but veteran trader Jeff Clark at The Growth Stock Wire believes this is more likely a context when traders should be cautious, instead of fully confident.
He has observed this week's price action has pushed the 50 moving average below the 200 moving average for the precious metal.
"To be completely honest, I'm not a big fan of following the 50- and 200-DMAs", reveals Clark. "They're just too popular. Everyone else pays attention to them, so their use as a technical tool is diluted. I prefer to look for signals no one else is following.
"But the death cross on silver's chart is a clear bearish sign… And no one noticed it. That makes me want to pay attention."
It has been three years since the last death cross appeared on price charts for silver (September 2008) and at the time that proved an ominous signal with the price of silver dropping 30% in the following two months.
Clark's advice is to tread carefully and maybe hold fire until better entry points might present themself in weeks ahead.
http://www.growthstockwire.com/
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