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The silver markets have recently broken out and above the $30 level, and the Tuesday trading action saw more supportive moves. However, it should be noted that the range is somewhat muted, and this is probably because of the Federal Reserve Chairman's speech that comes out on Friday. At this Jackson Hole, Wyoming speech he is expected to perhaps clear of his intentions on the issue of quantitative easing. If there is no hint of quantitative easing, this should continue to strengthen the US dollar. However, if he shows signs of easing, precious metals and commodities on the whole should in turn rise.
Because of this, we do favor the upside as we think the bullish move is still in its infancy. A break down below the $28 level would be very bearish for this market, but it isn't in till we get down to that level that we are interested in selling. However, if we manage to break to a newer high at the $31 handle, we are more than willing to start buying again.