After a bumpy start, the iShares Silver Trust (SLV) long position is recovering in sympathy with the climb in gold prices today, which itself is a reflection of continued weakness in the US dollar.

Purely from a technical perspective, the SLV has established a bouble bottom corrective low around 15.60. The upmove off of 15.60/65 has just started and represents the basing portion of a sizeable bull flag formation that should provide the launch-pad for the start of a new upleg that projects towards 18.25/75 next.

At this juncture, as long as 15.60/65 contains any forthcoming weakness, the bullish scenario will remain intact. Otherwise, my micro work points to a critical confrontation with key resistance at 16.45/50, which if (when) hurdled will unleash the upside potential of the anticipated new upleg.

Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com.