Silver Technical Analysis
Despite the fact that silver has been thought of at times as a way to run towards safety, we are definitely not seeing that here. It always plays second fiddle to gold in that respect anyway, but what I find interesting is that silver just cannot get a bid. In fact, at one point early in the session, we pierced the crucial $80 level.
At this point in time it looks like the bubble du jour has moved on from silver and into energy. That makes sense considering the war going on, but at the same time, it leaves a lot of questions for this market. I think it’s probably better to be left alone at the moment, because although we had a potential breakout, it has been repudiated with an extreme amount of force.
Extreme Volatility and Position Management
One has to wonder if silver can get a longer-term bid. Regardless, no matter what you do in this market, you must cut down your position size because the volatility is getting worse, not better. In that environment, yes, you can make a lot of money, but you can lose a lot very quickly.
I suspect we’ve probably seen more blown retail accounts in the last couple of days again as people had seen silver breaking out as a continuation of the parabolic movement. At this point, we need stability. We just don’t have it.
I don’t necessarily know that I want to short silver, but I would say this: if we were to break down below $70, things could get ugly really fast. We are trying to bounce, that’s a good sign, maybe we’ll stabilize between the $80 level on the bottom and the $90 level above. We’ll just have to wait and see.
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