Silver Price Analysis – Silver Sees Massive Drop at Open

Silver Technical Analysis

Silver gapped lower pretty significantly to kick off the trading session here on Tuesday but remained above $100. I think the $100 level is going to be important for a lot of traders out there.

As long as we can stay above there, I think you can make an argument for more buy on the dip behavior. That is the way this market has behaved, but this was a bit of a shaky opening. It was the first time we have seen a real problem in the market at the Asian opening.

Market Exhaustion and Volatility

I think you have to wonder whether or not we are starting to get to the point where gravity is going to be acknowledged. To be honest with you, I thought that would have happened a long time ago, but we will just have to wait and see.

Clearly, you cannot short this market, but it does look like we may enter an area of choppy volatility. That would make a certain amount of sense considering silver has doubled in roughly 7 weeks. That is not something that happens, so the exhaustion is real.

The idea of profit-taking is almost certainly real as well, and as long as we stay above $100, I would anticipate this is a market that is probably going to go more sideways than anything else. Breaking below $100 probably kicks off more selling, although I do not think it necessarily ends the trend.

If you’d like to know more about how to trade gold and silver, please visit our educational area.