Silver remains in its range trade this morning, but has made strong gains overnight, soaring by $1.20.
Look for selling to emerge in the $31-$31.25 zone, and support around $29.50-$30.
As open interest has plunged to nearly 100,000, and last week's COT report indicated a massive decline in the commercial short position, silver is now in its most bullish technical position since late 2008.
This does not mean that price cannot go lower and drive the MACD and open interest lower with an even greater reduction of shorts, but severe price declines with historically low MACD's and OI must be bought professionally. Physical silver is not a stock with a risk of going off the board completely.
The more fear you feel in silver, the SAFER it is to buy, as you are buying a TANGIBLE ASSET AND CURRENCY THAT HAS INTRINSIC VALUE.
For now, the bottom of the trading range is a buy, yet be prepared to buy any potential retest of the $26 overnight low from last Monday.
Gold is soaring this morning as well, up $35 overnight to $1665 before backing off slightly. Gold is now trading above Jim Sinclair's $1650 again.
The bottom in gold also appears to be in. Unlike silver which has violated its 2 year uptrend, gold has received strong support and remains well within its rising uptrend channel.