- During the trading session on Wednesday, we have seen the silver market take off to the upside, and at one point in time, even broke negative, but as the Americans came on board, we have seen the market get a push above the $32.35 level, a short-term barrier that I have been watching for some time.
- If we can keep up this type of momentum, we could see silver trying to get to the $33.33 region, an area that was the most recent swing high.
The US dollar falling the way it has will have an influence on this market, as the silver market is obviously priced in those very US dollars. Because of this, I think you need to be looking for short-term pullbacks as a potential buying opportunities as the US dollar showing no real signs of strengthening. Yes, there will be the occasional fluctuation, and I do think at this point in time most traders are betting on some type of recession in the United States, which obviously will have a major influence on the greenback itself, and possibly the stock market as well.
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Technical Analysis
The Wednesday set up looks pretty strong, and if we can stay above the $32.35 level, we have entered a new area of trading again. On the other hand, if we were to fall from here, I would anticipate that the 50 Day EMA, near the $32 level, should continue to offer support, right along with the $31 level. The $31 level has been important multiple times, so this should not be a huge surprise to see that it is offering some type of short-term floor in the market. Anything below that level could get rather ugly, as the silver market almost certainly plunges to the 200 Day EMA and the $30 level after that.
I have no interest in shorting silver, but I do recognize that it is an extraordinarily volatile asset, and therefore you need to be cautious with your position sizing. If the market continues to be as wild as it has been, then I might be more apt to trade short term charts over longer term once.
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