Potential signal:
- I would consider buying at 33.33, but only with a small position.
- If silver drops to 33.10, I would get out.
- I would be aiming for the recent highs.
Silver's had a bad day as it initially went higher, and it really looked like it was going to take off during the Friday session but gave all of that back as we continue to see chaos being sown in the financial markets. It appears that we are going to head into major tariff wars at this point, unless something truly changes.
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That has people worried about risk assets and as the start stock markets around the world decided to melt down. Traders have to get rid of things that are making money to cover margin in other places. And I think that's what happened in silver. We did at one point look really close to breaking out to the upside, but we just could not hang on to the gains. Now I don't necessarily think that we get some type of major sell off here. I just think you have a situation where traders will be looking to take advantage of short-term pullbacks to start buying again, we could drop all the way down to the $33.33 level and I wouldn't bat an eye.
This Was a Really Bad Day
This was a horrible day. And although things have been very bullish previously, I recognize that you need to let the price come to you because silver has been so bullish over the last several days. And if we do break out to the upside, turn around and just rally, then taking out the $35 level opens up the possibility of a move to a much bigger level, perhaps as high as $50, as we have seen a couple of times in the past. In general, you also have to pay attention to the US dollar because if that starts to strengthen, that could really work against silver as well. Ultimately, this is a market that I'm looking for pullbacks to take advantage of, but I also recognize that I don't want to be the first one to get back involved in the market. Friday was just too ugly.
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