- Silver remains highly volatile, with fading volume and conflicting technical signals shaping a cautious trading environment.
- Key levels on both sides define whether the market confirms a double-top or instead forms a bullish continuation pattern.
Silver continues to see quite a bit of volatility as we have bounced around during the trading session here on Monday. With all of that being said, I think it's important to keep in mind that several things are going on at the same time that come into play. The first one is that we are seeing reasonable volume, but it's much less than the initial shot higher. So that always is a bit of a concern, especially after you just formed a classic double-topping pattern. Whether or not we confirm that double-top really comes into question because we would have to break through the $46.50 level roughly to completely confirm it. The action on Monday is at least hopeful, as we have recovered the $50 level, at least so far, and that of course, is important, but I'm watching the $51.50 level to see if we can get above there.
Critical Technical Levels in Play
If we can, then this will probably rapidly turn into an ascending triangle pattern for most technical traders. Again, though, the volume is dropping off, and I don't think this week is the week you're looking for volume to pick up. After all, we have Thanksgiving on Thursday, which has a massive influence on the futures market in the United States. And on Friday, most people won't be working. So, I would anticipate a little bit of sideways drift here. I wouldn't short the market. I wouldn't necessarily buy it with a ton of money either. I think you've got a scenario where short-term intraday futures trades probably make the most sense, but as far as getting aggressive at this point, I don't think that's the game you should be playing.
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I'll be watching that $46.50 level because you have broken an uptrend line and the 50-day EMA. I think at that point, it would just be too much damage to the market. I'll also be watching that $51.50 level because if we can break above there with any type of real volume, that's probably a bullish sign as well. We are at a major point of inflection.
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