Hi Ho Silver....

In the 4/12 post The Great Silver Levitation, I argued that drama lay ahead as the majestically
overbought metal was poised for another historic breakout. Traders ignored the overbought, and
pushed silver to nearly $50 oz. from $40. Subsequently, contract margin requirements have been
raised three times and the metal has dropped rapidly down to $41.72.

Silver remains majestically overbought and the near term bottom is not yet clearly in view.
There is chart support down in the low $30's and 200 day m/a support in the $28 - 30 oz. range.
The metal has held the 200 m/a decently since the cyclical bull started in late 2008. There is
also cyclical trend support down in the low $20s.

As I discussed in the 4/12 post, silver has turned out to be one of the great American crash
dummies over the very long term, with huge downward cascades in price coming after spectacular
run-ups. Since silver deserves respectability as an investment medium and not just as the
very occasional speculative toy, I continue to hope that when the dust settles after this round,
the market will again be appraised sanely.

I would also reiterate a suggestion I have made before. When a commodity or financial instrument
exceeds its 200 day m/a by more than 20% on a price run-up, only the most nimble traders should
mess with it on the long side.

Silver