Silver markets have been on an absolute barn burning path over the last several days, and Friday was really no different. Ultimately, we gapped higher and then reached above the $16.50 level. At this point, a pullback makes quite a bit of sense, and quite frankly it’s something that I welcome. I am still extraordinarily bullish of silver, but I believe that the market has gotten way ahead of itself. If that’s going to be the case, then it makes sense that the buyers will be waiting underneath. The $16.00 level underneath should be supportive, as it is a large, round, psychologically significant figure.
SILVER Video 22.07.19
Even if we were to break down below there, it’s not until we sliced through the $15.50 level that I would be looking to short this market. Ultimately, I think it’s only a matter of time before we bounce and go higher. Look for value in the silver market, because the Federal Reserve is looking to cut interest rates. That does give a bit of a boost to the precious metals markets, but that doesn’t mean that they go straight up in the sky.
Looking at this chart, it’s likely that the market simply needs to catch its breath. This is typical when you get a bit of a parabolic move like we have seen, so I’m looking for an opportunity underneath. At this point, it’s simply a matter of stepping to the side and allowing value to reenter the picture. The alternate scenario of course is that we break above the top of the shooting star that is forming for the Friday session, but that makes it even more dangerous and parabolic.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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