- It’s hard not to notice that this market continues to suffer at the hands of selling pressure.
- That being said, we are starting to show signs of life again, as the $28.50 level has offered massive support.
- Furthermore, it’s an area that previously had been resistant, so it does make a certain amount of sense that we would have a lot of “market memory” in this region.
If we were to turn around and rally from here, the reality is that breaking above the 50-Day EMA would be a bullish sign, and then if we could recapture the $30 level, it’s likely that the market could go looking to the $31.50 level. Regardless, the silver market is likely to continue to see a lot of volatility, but with that being said, the market is going to be one that you need to be cautious with the position sizing, but that’s typical for silver as it is such a horribly volatile asset.
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Risk Appetite
The risk appetite around the world is a fluid situation, so you need to be cautious about getting too aggressive in this market, or any other one for that matter. After all, we have seen a lot of volatile swings over the last several days in various assets, and therefore it’s not a huge surprise to see that silver, one that is typically a very volatile asset, has gone right along with that play. Ultimately, I think this is a situation where traders continue to look at this through the prism of whether or not the $28.50 level holds, because it is such an obvious area.
If we were to break down below the $28.50 level, then I think that silver could drop toward the $27.50 level underneath, and perhaps even as low as the 200-Day EMA. In that environment, I anticipated that silver would probably become unraveled, and we could see a massive drop. On the other hand, if we do rally from here, I think it’s more or less a grind higher in the short term.
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