Silver Technical Analysis
The silver market initially tried to rally on Wednesday, but then gave back its gains pretty quickly as the area above $80 continues to be difficult to overcome. That being said, I think it’s probably a good thing because, quite frankly, we can’t go straight up in the air every day, or sooner or later, somebody starts to ask questions about gravity.
Silver has been very guilty of ignoring gravity over the last several months, and sooner or later, you have to have more orders come into the market to support higher prices, which isn’t always the easiest thing to do. That being said, I certainly wouldn’t get short of this market.
Consolidation and Technical Floors
I think we’re still very much in consolidation with the $70 level underneath being a bit of a floor. We do have the jobs number coming out on Friday, and that might be part of what’s going on here, as traders don’t want to be exposed to what is a very volatile instrument during a very volatile time of the month.
So, I’m looking at this as a potential pullback that traders will take advantage of. The closer we get to $70, the more interested I get in buying it. I don’t have any interest in shorting silver, but if we broke down below $70, that could open up pretty significant downward pressure in the form of a correction that could drop all the way down to the 50-day EMA currently sitting at $61.73. Anything below that could be ugly, but only time will tell.
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