Silver Price Outlook – Silver Drops Significantly Early on Tuesday

Silver Technical Analysis

So, it looks like silver is plunging early on Tuesday morning, we’re down about 5 % as I record this. And quite frankly, this doesn’t surprise me. We’ve gotten so overdone in silver at this point that this pretty much had to happen. The futures market is now below $50. I imagine the spot market is probably still a little bit above 50. But really, at this point in time, I think we are getting close to the beginning of the end. I don’t know how far we will drop, and it really wouldn’t surprise me to see this market break back above $50 in the futures contract by the end of the day. Both are very possible.

The volatility picking up in silver and the volume picking up tells me, though, that we’ve got a real fight on our hands. Historically speaking, that’s not good for silver. As for myself, I will be playing this via buying puts because I’ll know my potential loss right off the bat. I’m not going to bother shorting over, at least not yet. If we give up $46, then I think I will, and that will probably be a 12-month trade.

To the upside, if we recapture 50, short-term traders can continue, I imagine, to look at short-term dips as potential buying opportunities. But when everybody runs for the exits in this market, it is going to be massive. I’m starting to see everybody talking about silver. Everybody’s a silver expert all of a sudden. Even random people that I run into on the street now. So not a good sign.

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