Potential signal:
- I could be a buyer of silver above $31, on an hourly close.
- I would have a stop at $30, with a target of 33.10$ above.
The silver market has been all over the place during the early hours of Wednesday, as we continue to dance around the $30 level. The $30 level is a large, round, psychologically significant figure that a lot of people might be paying close attention to at the moment. However, the reality is that the market is still going to be very noisy, mainly due to the fact that we are reacting to headlines, not necessarily anything that is considered to be “real.”
Technical Analysis
Silver has been stabilizing over the last 3 days, just at the $30 level. We had dropped as low as sub $28, but we have popped back up in the air as a result. All things being equal, this is a market that I think will remain very noisy, because quite frankly, silver is extraordinarily volatile to say the least. All things being equal, this is a market that is quite widely under the best of circumstances, so the fact that we are relatively quiet over the last couple of days is a good sign that perhaps we are starting to get to the end of the volatility. I’m not ready to start buying silver here, but a move above the 200 Day EMA, which is just above the crucial $31 level, could send silver much higher.
Alternatively, if we were to break down below the bottom of the wild Monday candlestick, that could send silver crashing. In this environment, it wouldn’t surprise me, no matter which direction we pick. You have to understand that we are probably one tweet or announcement away from a massive move in either direction. It looks to me like the market is setting up for some potential good news, as the bad news has certainly been priced in over the last several weeks. Nonetheless, things can always get worse, so you can’t just buy silver, or any other market for that matter, based on hope. Watch the levels and react accordingly.
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