Springboard Your Way To Silver Profits

The pre Fourth of July holiday week saw stocks rally off key support. The five session gains in excess of 5% for the major stock indexes marked the biggest weekly advance in two years. The bottoming potential at March lows reversed stocks with conviction.

Commodity contracts actually led the way higher…

Crude, cocoa, sugar and live cattle built on their price base.

#-ad_banner-#The corrections in the overall bullish trends proved to be buying opportunities when prices were down.

Of course, this is easy to see in retrospect. Buying dips has been an easy, but profitable, strategy since the depths of the financial crisis.

Solid overall trends remain intact. What has been going up continues to rebound and rally. Other declining markets in Treasury yields, Natural Gas and the US Dollar are resuming the dominant downswing.

And here lays a big potential mover…

Silver never quite hit the $50 an ounce price at late April highs. The combination of the multi-year trend that doubled prices in 2010 and again in 2011 plus the emotion of a crowded trade led to asset unwinding.

The Silver Springboard

Sideways trading on Silver for the last two months within a range has held the key support…

The $30 level had tempered upside rallies three times!

In addition, the dollar has formed a triple top at 76 to set the tone for lower greenbacks. A similar dollar channel looks to resume the downtrend inversely to the silver uptrend when you look at the six-month charts side by side.

It doesn’t take much expertise to identify the extreme silver highs coincide with the extreme dollar lows.

You should watch this trend. As the dollar continues to fall, silver could rise even higher. Just be sure not to chase the highs…you will want to buy near support to maximize potential profits.

[Note: Last month, Alan introduced you to playing silver’s pullback. If you missed it, simply click here. There are many ways you can play silver right now. One way is by taking a look at iShares Silver Trust (ETF) (NYSE: SLV). If ETFs are not for you, you can start by looking at these two companies: Silver Wheaton Corp (NYSE: SLW) and Coeur d’Alene Mines Corporation (NYSE: CDE).

Plan your trade…you could see profits on the next silver rally.

But of course, before buying anything…make sure to do your research.]