Good Entry for SLV?

Over the years I have made a good deal of money trading SLV. Very odd considering I rarely do TA on the SLV etf. I have simply purchased at levels that I "feel" are right and sell at levels that net nice returns.

I don't wish to dwell on the physical vrs. paper arguement - at least not too much. I will say that I am going to add physical silver this month. The benefit being that physical is truly a long term investment AND in the event of a nasty social/political/economic upheaval - fiat currency may not be that valuable.

From a trading standpoint, I am accumulating SLV right now. Open the chart and I will try to explain why:




First, note the up channel bounded by the yellow trend lines. We recently broke the bottom trend line and (like the equities) have bounced back - just inside the lower line. IF we are to remain in the up channel, this is a decent entry point. IF we are breaking down and out there are some key support levels just below - which should at least temper further downside risk.

The Long Term Support Zone is highlighted in green. Follow the thin green line across to the left. You will see that this line aligns nicely with the tops of several reaction highs during the last three years. The more reaction highs, the more like the support will hold. We just touched that line this past week. Just below that green line is the 50% retrace level of the March rally. This is a common spot for reversal. These levels are very close to the $14 level. Any buys in this area I think are good ones.

What if we break below $14? Well that is not good and I would probably unload. I would do so with an eye at the $12.50 area. I choose this spot for several reasons. First, it would be a test of the major down trend line that started in 2008. If we do not bounce there - look out below. Second, it alings with the 62% retrace off the bottom. This is the last chance for a reversal. Failure there would suggest a pretty nasty future. Finally, the $12.50 level has proven to be a long term support for reaction lows over the three year period.

As you know, I am short the market. The good news is that I am only 60 S&P points out from profitability on those positions and 600 dow points away. In both cases I have some insurance that limits my loss potential through March. When looking at the true pressure in the market - currency crisis - I think SLV is a smart play. If there is going to be a currency crisis - I think GLD and SLV are going to be the ultimate safe haven play. Also, though DEBT and CURRENCY concerns are driving the current market activity - there is still industrial demand and silver has a role beyond safe haven.

That is my take on silver and why I am willing to play the long swing position for now.

I am very interested in comments on this subject.

Thanks!