During the day on Thursday, the silver markets reached towards the $20.50 level again, but we found quite a bit of resistance there and we turned around to form a shooting star. With this being the case, it looks as if the market is struggling to break down of the previous consolidation area, and with that being the case I believe that the market will more than likely try to find buyers below, especially at the $19.50 level which has been the bottom of consolidation as of late.
The red moving average on the chart is the 20-day exponential moving average, and this is a moving average it tends to attract quite a bit of attention in the futures markets. Below there, I have the 50-day exponential moving average and blue, and you can see that it is turned up as well. In other words, this is a market that seems to have quite a bit of momentum to the upside.
This is a market that has long-term bullish pressure my estimation, and I believe that this pullback is probably one that should not be sold. I think you will simply find quite a bit of pressure underneath that could offer buying opportunities. With fact, I feel it’s only a matter of time before the buyers return and I would love to see some type of supportive candle, especially near the $19.50 handle. Beyond that, the other buying opportunity that I see could be a breakout above the top of the shooting star for the day, meaning that we broke out above the $20.50 handle. That of course would be a massively strong move, and that would send this market looking for higher levels, such as $22, and possibly $25 given enough time. I think this is a market that should continue to go higher due to the fact that there is a lot of uncertainty around the world, and of course that continues to drive the “hard currency” trade, even though the US dollar should continue to climb at the same time, as the world looks for safety.