The Scene of Many a Controversy

If you know your Wall Street history then you know that there have been many controversies over time with respect to various speculators attempting to "corner the market" in the precious metal with industrial utility, otherwise known as silver. But we can go through history lessons such as "Silver Thursday," another time.

Ironically, though, on this particular Thursday we will focus solely on what the current silver chart tells us albeit with a glance at historical price action for context.

On the silver ETF monthly, chart, below, the March selloff alongside equities took silver back below the $13 level, which had been acting as firm support for at least five years in the wake of silver's collapse since 2011. 

At some point, though, we look for changes in character, especially with the backdrop of an overly-accommodating Fed and federal government in an election year. With another three million in jobless claims this morning, The Fed seems hellbent on preventing a deflationary collapse, which means money printing is their default mechanism at all costs, accompanied by a side dish, potentially, of negative rates in the not-too-distant future.

As we have been discussing with gold, there are some changes in character between the metals now versus back in March. Although the selling this week in equities has not been as violent as it was in March, the precious metals have not given back in inch, with gold leading. 

But silver may be ripe to play catch-up, especially with its failure to hold below $13 this spring.

And when we look for signs of a bear market ending, usually the false-breakdown at obvious support is a good start. Now we need to see fairly imminent follow-through to cement the change in character as the precious metals have quite the wind at their backs going forward.