The silver markets fell during the session on Friday, but remain above the supportive $20.60 level that has kept the market somewhat afloat after having a fairly impulsive move a few weeks ago. When we broke above the $20.00 level, that was in fact a decent break out and it sends the market to higher levels as it shows a significant amount of buying momentum. However, that’s not to say that we all have problems above.

The $22.00 level will be resistive, and as a result I feel that this market will struggle to get above there. Nonetheless, I do think it happens given enough time, as the resistance barrier will ultimately be overcome simply based upon the momentum that I see in the marketplace.

The silver markets were oversold, that’s about to change.

The silver markets were drastically oversold recently, and I feel that we are about to change that mistake. After all, recent comments by the Federal Reserve chairwoman Janet Yellen suggesting that the economy will still need to be supported, even after we get out of recession. This of course should be a bit destructive for the US dollar and its value, and it shows that there will continue to be easy money policies coming out of Washington DC. On top of that though, it appears that the European Central Bank is set to have easy monetary policies put in motion, and as a result traders will look to hard assets in order to retain their wealth.

With that being the case, I believe that the market will more than likely continue higher, and pullbacks will be opportunities to buy silver based upon “value.” I think that ultimately the silver markets will go to the $25.00 level, and then possibly much higher than that based upon longer-term chart. With that, I think that supportive candles below will be triggers for the buyers to come back into the marketplace and continue to push silver higher. Ultimately, options might be the way to play this market as of volatility could continue, but there is also the possibility of buying physical several which of course helps dampen some of the leverage that the futures market can bring.

Silver 72114

Related Articles
  1. Professionals

    Top Tips for Helping Clients Through a Divorce

    It may take a delicate touch to properly assist clients who are going through a divorce. Here are some tips.
  2. Economics

    Keep an Eye on These Emerging Economies

    Emerging markets have been hammered lately, but these three countries (and their large and young populations) are worth monitoring.
  3. Brokers

    How RIAs and Independent Broker-Dealers Differ

    There are many types of financial planners. Here we break down what sets RIAs apart from independent broker-dealers.
  4. Stock Analysis

    Is Pepsi (PEP) Still a Safe Bet?

    PepsiCo has long been known as one of the most resilient stocks throughout the broader market. Is this still the case today?
  5. Professionals

    How to Help Worried Clients See the Big Picture

    Advisors can have a tough time selling clients on the bigger picture, especially when the market is volatile. Here's how to manage expectations.
  6. Home & Auto

    Luxury Cars with the Best Resale Value

    Autos rarely appreciate in value. But if you want a set of wheels that'll least hold its value over time, these cars can go the distance.
  7. Mutual Funds & ETFs

    What Target-Date Funds Can Teach About Investing

    Target-date funds are a popular way to invest for retirement. Here's what they can teach the novice investor.
  8. Professionals

    Charity or Retirement Saving: Which to Prioritize?

    Financial planners need to help clients with their financial goals but also support them in their philanthropic endeavours.
  9. Chart Advisor

    ChartAdvisor for October 9 2015

    Weekly technical summary of the major U.S. indexes.
  10. Investing Basics

    Learn How To Trade Gold In 4 Steps

    Trading spot gold or gold futures, equities and options isn’t hard to learn, but the activity requires skill sets unique to these markets.
  1. Does working capital measure liquidity?

    Working capital is a commonly used metric, not only for a company’s liquidity but also for its operational efficiency and ... Read Full Answer >>
  2. Can working capital be negative?

    Working capital can be negative if a company's current assets are less than its current liabilities. Working capital is calculated ... Read Full Answer >>
  3. How do hedge funds use equity options?

    With the growth in the size and number of hedge funds over the past decade, the interest in how these funds go about generating ... Read Full Answer >>
  4. Are Cafeteria plans taxable?

    Whether the benefits you receive through your employer-sponsored cafeteria plan are taxable depends entirely on which benefits ... Read Full Answer >>
  5. Can mutual funds only hold stocks?

    There are some types of mutual funds, called stock funds or equity funds, which hold only stocks. However, there are a number ... Read Full Answer >>
  6. How do mutual funds compound interest?

    The magic of compound interest can be summed up as the concept of interest making interest. On the other hand, simple interest ... Read Full Answer >>

You May Also Like

Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!