Silver Forecast September 13, 2012, Technical Analysis
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The silver markets had a wild session on Wednesday, as they rocked back and forth between $32.50 and $34. With all this being said, we still look rather bullish as we are towards the top of the recent rally, and there is expected to be quantitative easing out of the Federal Reserve later today.
Nonetheless, we have risen quite a bit over the last couple weeks and it would be nice to have a significant pullback from which to get involved in. Buying at this point in time we believe that we could be “chasing the trade”, and that is the last thing you want to do. The move has already happened, and shown itself to be true. Your job if you are not involved in the silver market right now is to simply let the market pullback so you can buy at a better price.
We ultimately think that the silver markets will hit the $50 level again, but not necessarily in the short-term. Superbikes around the world are easing in general, and as such this is a “long only” market as far as we’re concerned. Every time this market falls, we buy on signs of support.
It isn’t until we get well below the $25 level that we think the bull run in silver is gone. The market is one that you should be investing and, not necessarily short-term trading. We prefer to buy the SLV ETF instead of futures because of the high probability of volatility. Also, if you have the ability to buy physical silver it is suggested as well simply because of the longer-term possibility of significant gains.
If you do find yourself trading the source futures market, remember that it can be quite volatile and it is not for the faint hearted. If you are outside the United States, CFDs are a wonderful way to play the futures market with much lower leverages you can pick your own position size.
Either way, it doesn’t matter how you play the market as long as you are buying. Selling silver seems like it could lead to nothing but pain in the long run.
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Christopher is a part of the FXEmpire.com analysis team. He writes Forex and Commodities technical analyses on daily and weekly basis. Christopher writes his analyses in a professional and yet simple to understand manner. His analyses are available in both text and videos.
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