The silver markets tried to rally during the course of the session on Wednesday, but as you can see above the $19.20 level, we found far too much in the way of resistance. The resulting selling pressure ended up forming a shooting star for the daily candle, which of course is a negative sign. However, we have to wait to see what happens of the $19 level in my opinion, because it is an area that has been so important in the past. Yes, we did recently break through it, so in theory it should be easier to break down again. However, if it doesn’t get broken down easily, I think that shows that we are trying to form some type of bottom in this market.

If we get below the $19 level without too many issues, I think that we will ultimately break down to about $15. This is a market that has been beat down significantly, and as a result we may have to grind about this area for some time in order to break down and open the trapdoor so to speak. That trapdoor gets opened though, the move down could be rather drastic.

I’m still longer-term bullish though.

To be honest, I believe that silver will ultimately become very expensive. However, right now isn’t the time to be speculating on that type of thought process. I believe that longer-term traders will find this to be a market that can be bought into, but not yet. I am waiting on some type of nice supportive candle on a longer-term chart such as the weekly timeframe in order to start buying physical silver first, and then possibly options. The silver futures market is far too volatile inexpensive to be messing about trying to play some type of counter trend position.

All that being said, in the short term I certainly think that this market is ready to continue selling off, and as a result I will not argue that point. However, if we were to somehow get above the $19.50 level, I think at that point in time the buyers would start to assert their will again.

Silver 61214

Related Articles
  1. Investing

    5 Signs It's Time to Dump Your ETF

    You’ve bought into your favorite ETF, and it's been a great ride. When should you exit? Here are the top signals to exit an ETF position.
  2. Savings

    Do Natural Gas Prices Always Follow Oil Trends?

    Prices for oil and natural gas are highly correlated. But investors should be aware of different factors affecting the prices of these commodities.
  3. Charts & Patterns

    Understand How Square Works before the IPO

    Square is reported to have filed for an IPO. For interested investors wondering how the company makes money, Investopedia takes a look at its business.
  4. Trading Strategies

    The Top Spread-Betting Strategies

    What are the most commonly followed spread-betting strategies (in countries where it's legal)?
  5. Forex

    The Pros and Cons of a Fully Convertible Rupee

    Amid the rising economic power of India, the talks of making the Indian currency fully convertible are gaining momentum. We look at the pros and cons.
  6. Investing News

    Is Quinoa Unhealthy for Bolivia's Economy?

    Is one of the world’s healthiest superfoods terribly unhealthy for its country's economy?
  7. Investing

    Top Cities Where Airbnb Is Legal Or Illegal

    Thinking of subletting your apartment on Airbnb? Make sure that you meet your city's regulations first.
  8. Markets

    Why Gluten Free Is Now Big Business

    Is it essential to preserving your health, or just another diet fad? Either way, gluten-free foods have become big business.
  9. Technical Indicators

    4 Ways to Find a Penny Stock Worth Millions

    Thinking of trading in risky penny stocks? Use this checklist to find bargains, not scams.
  10. Entrepreneurship

    World's Top 10 Serial Entrepreneurs

    There are entrepreneurs, and then there are serial entrepreneurs. Investopedia takes a look at who they are and how they keep making it big.
  1. Record Date

    The cut-off date established by a company in order to determine ...
  2. Supply

    A fundamental economic concept that describes the total amount ...
  3. Purchasing Power

    The value of a currency expressed in terms of the amount of goods ...
  4. Investment Banker

    Someone working at an institution raising capital for companies, ...
  5. Yield To Maturity (YTM)

    The total return anticipated on a bond if the bond is held until ...
  6. Gross Profit

    A company's total revenue (equivalent to total sales) minus the ...
  1. Are stocks real assets?

    Stocks are financial assets, not real assets. Financial assets are paper assets that can be easily converted to cash. Real ... Read Full Answer >>
  2. Why would someone change their Social Security number?

    In general, the Social Security Administration, or SSA, does not encourage citizens to change their Social Security numbers, ... Read Full Answer >>
  3. Are spousal Social Security benefits taxable?

    Your spousal Social Security benefits may be taxable, depending on your total household income for the year. About one-third ... Read Full Answer >>
  4. What are the best ways to sell an annuity?

    The best ways to sell an annuity are to locate buyers from insurance agents or companies that specialize in connecting buyers ... Read Full Answer >>
  5. How are non-qualified variable annuities taxed?

    Non-qualified variable annuities are tax-deferred investment vehicles with a unique tax structure. After-tax money is deposited ... Read Full Answer >>
  6. Are spousal Social Security benefits retroactive?

    Spousal Social Security benefits are retroactive. These benefits are quite complicated, and anyone in this type of situation ... 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!