There is strong circumstantial evidence - furnished by a number of very bullish silver stock charts - that silver is eventually going to break substantially higher, despite the current whipsaw action, which was predicted in the last update.
On the 2-year chart we see that silver broke down marginally from its long-term uptrend late in June, but has, so far at least, found support at the important $6.80 level. As pointed out in the last update, because of the late breakout from the large triangle formation, erratic action is to be expected in the near-term, and short-term traders should trim positions accordingly as overbought or oversold conditions develop.
The 6-month chart shows recent action in more detail, in particular the late June breakdown, which was considered probable in the last update, due to the high Commercial short position. In that update it was stated that key support at $6.80 needed to hold, it has, so far, and is currently generating a bounce. An encouraging development at this time is the significant reduction in the Commercials' short position, shown further down the page.
Until the price succeeds in breaking well clear of the large triangle shown on the 2-year chart and establishing a definite trend, we can expect to see erratic behaviour, as whether it likes it or not, it will soon be forced to leave behind the "security blanket" of its large triangular trading range. Downside is believed to be limited, because silver is cheap in inflation adjusted terms, while upside is relatively unlimited. A break above the resistance around last years' highs in the $8 - $8.30 area will be a major technical event that should usher in a vigorous uptrend. As pointed out at the top, this is what a number of silver stocks are indicating is going to happen.