In the last update it was pointed out that silver looked stronger than gold, and it has since outperformed gold significantly, which in itself is a warning that the uptrend in the broad stockmarket is mature. However, the larger trend for silver must be classified as neutral at this time.

On its 3-year chart we can see that although silver has rallied well in recent weeks it is confronted with a line of heavy resistance in the $16 area which is expected to keep a lid on it, except in the event that gold succeeds in breaking out to new highs, in which case silver could vault this resistance and then proceed to work its way through the remaining resistance approaching its highs. The first and only time it approached the resistance in the $16 in the recent past was in late May / early June whereupon it got smacked down hard, and the subsequent failure of the uptrend in force from last November switched the intermediate trend from up to neutral, which is why silver is now considered to be rangebound between the support and resistance shown, and a trading buy towards the bottom of this range with a stop under the support and a trading sell towards the top of it with a stop above the resistance.

Silver's COT chart has looked considerably more positive than gold for some weeks, but now the Large Spec long and Commercial short positions are climbing, although they are not yet at the extreme levels suggestive of a reversal. However, the matter may well be decided by gold, whose COT chart is already showing extreme readings. Clearly, if gold holds up for a while longer, silver may motor up to the $16 area again, but if gold breaks down sidekick silver will get kicked down again.