- The first thing that I would mention is that it seems like we are trying to stabilize after a brutal sell off.
- That being said, there's not a lot going on here that has me excited in one direction or the other. I do think that over the longer term we will have to sort out the trend, but right now it is still technically very bullish.
The $28.50 level above is a massive resistance barrier, as it had previously been massive support. The early during the trading session on Monday, we had seen the silver market trying to reach that area, but we just could not get to that level, let alone break above it. That being said, it's not exactly like we're breaking down on the session either. In other words, nothing is happening in the markets as I do this analysis.
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It looks like the market is just hanging around the $28 level and trying to determine what to do next. Even if we were to fall from here, I think there is plenty of support underneath, especially near the $26.50 level, which also features the 200 day EMA. If and when we break down below that level, then things could get rather ugly.
You Need to be Careful
Keep in mind that silver is typically very messy and noisy and has a long history of being manipulated to the downside. Every couple of years, you start to hear retail traders attempting to fire off a short squeeze for massive banks that have suppressed the price of silver over the years, including JP Morgan, who has been fined multiple times for doing so. With that being said, there is an upside, but you have to keep in mind silver is an extraordinarily dangerous market over the long term, so you have to be cautious with your position sizing.
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