Potential signal:
- I am buying silver on a break above the $31.50 level, with a stop loss at the $31 level, and a target of $33.10 above.
During my daily analysis of the silver market, the first thing that I have noticed that is going on in the market is that every time we dip, there seems to be a certain amount of buying going on.
While the candlestick was negative for the Friday session, you cannot ignore the fact that there were a lot of buyers willing to come in and pick up “cheap silver ounces.” The market seems to be wanting to stay above the $31 level, and most certainly it looks like the $30 level underneath has formed a bit of a “hard floor.”
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Technical Analysis
The technical analysis for the silver market is rather straightforward. After all, the $30 level has been like a “brick wall” as far as short sellers are concerned, and it now looks like we are in the midst of trying to form some type of massive “W pattern”, which obviously is a very bullish sign. If we can clear the $31.50 level, then I think will continue to see a little bit more in the way of “FOMO trading” entering the market, as traders try to keep up with what will be significant momentum.
Otherwise, we could pull back and continue the overall consolidation, but right now I think we’ve got a situation where it is obvious on Friday that people really are taking the idea of shorting silver very seriously, and with the jobs number coming out stronger than anticipated we could see a little bit more in the way of industrial demand. With this, I think silver will probably do fairly well, but you also have to be cautious with the idea of the market being very noisy, but at this juncture I think that we’ve got a scenario where the market participants are going to continue to see each and every dip as a potential buying opportunity to pick up “cheap silver ounces.”
If we break out to the upside, I anticipate that this market will eventually go looking to the $35 level, and there’s nothing on this chart that tells me that couldn’t happen, and as long as we stay above the $29.50 level, I think the uptrend is very much intact.
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