Silver Continues to Struggle With Resistance

NEW YORK (March 16) Silver has tried to rally a bit during the trading session on Thursday, eking out some gains but at this point it looks like we see quite a bit of resistance that is coming back into the picture, and causing a bit of a headache for traders. Ultimately, I think this is a market that will continue to take close attention to risk appetite and of course bonds, as the bond market yields may or may not come into play rather soon.

It’s also worth noting that we are hanging around the 200-Day EMA, and of course the psychologically important $22 level. Both of these could factor in seeing more volatility, and therefore you need to keep that in the back of your mind. I think at this point, we probably have a situation where the market would be paying close attention to the fact that we formed a hammer followed by an inverted hammer, and today we seem to be rather choppy.

If we break down below the hammer from Tuesday, then I think it opens up a flood of selling at that point. On the other hand, if we were to turn on a break above the top of the inverted hammer from Wednesday, that opens up quite a bit of buying pressure, perhaps sending silver all the way to the $23.50 level. That being said, if we do break down at this point and slice below that hammer from Tuesday, we could be looking at a move all the way back down to the $20 level.

The one thing that you can count on is that there is going to be a lot of volatility in this market, which is normal for silver to begin with. After all, it is a much smaller market than gold, so it’s almost like a levered ETF based on gold. Nonetheless, this is a market that I think is at a major inflection point, so look for some type of impulsive candlestick on the daily chart to lead you as far as directionality is concerned. Recently, we had seen a massive shot higher, so now we are trying to figure out whether or not we have more momentum to retire.

FXEmpire