Silver Trying to Break Above Important Level

NEW YORK (February 9) The silver market has broken above the $80 level at one point during the trading session on Monday, but it is starting to give back some of those gains.

Ultimately, if the market were to break higher the $90 level could be targeted, but I also recognize that short-term pullbacks are more likely than not going to be buying opportunities as long as we can continue to stay above $70.

Obviously, silver gets a lot of attention at the moment, but this wipeout candlestick from a couple of Fridays ago is something that really tells you there’s a real problem here. This isn’t to say that silver can’t go higher. I think it will eventually, but in the meantime, the best thing that you can see in a market like this that had gotten so far ahead of itself is some type of consolidation.

Need for Market Stabilization

The sideways consolidation gives you the ability for the market to at least find its footing, try to stabilize a bit, and eventually continue higher.

If we break down below the candlestick from Friday, I think we will probably go down to about $55 where the 200-day EMA currently resides. I think we have a very tough several weeks ahead of us.

I don’t think that the volatility is going to be a major headwind because when you look at a chart like this, do you feel like you should jump in and throw a ton of your money into it? The answer, of course, is no. So, a little bit of healing is prescribed.

FXEmpire