- The silver market has been especially ugly during the trading session on Monday, as we have plunged lower in more “risk off trading” right away.
- This is a bit shocking, considering that traders recently have been all about owning precious metals, but this also speaks to the fact that silver is not the same thing as gold, and that there is a bit of industrial trade to be had here as well.
As traders continue to worry about a recession, this causes a bit of panic, and this means that traders start to think that silver won’t be in as much demand as it once was. Whether or not this is true remains to be seen, but the reality is we have a situation where the market continues to see a lot of volatility, and volatility is something that typically is bad news for silver. After all, silver is volatile under the best of circumstances, and this is in exactly the best of conditions. We are in an uptrend still, but we are also possibly looking at a “lower high” being made.
Trend Being Changed?
It’s a bit early to be talking about the trend being change, but there are a couple of things that I’m paying close attention to. The fact that we formed a “lower high” is the first thing that captures my attention, but we have a “handyman” candlestick that was just broken through, and that of course is a negative sign as well. That being said, there’s also the 50 Day EMA rising at this point in time, looking very much like a market that is trying to find that level. If we break down below there, then it opens up the possibility of the silver market dropping to the $31 level.
All things being equal, this is a market that will continue to be very noisy, but ultimately this is a situation where we continue to find buyers looking for value, at least for the time being. However, if we break down below the $31 level, look out below.
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