This week has been extremely turbulent for silver, as we continue to observe a great deal of chop and volatility not only in this market but in every other market as well. The $18.00 level continues to be a significant support level, and if it were to be breached, it may open the floodgates for silver selling, given its reliability. It is likely worth mentioning that the 50-Week EMA has just crossed below the 200-Week EMA, thus a scenario in which the market accelerates to the downside is possible.
Looking at this chart, it is quite likely that we will continue to observe erratic behavior at best. Therefore, I believe the market is one in which you should be extremely cautious with your position size, as most people have no idea what they’re doing at this time. Next week, we will be waiting to hear what the Federal Reserve has to say, which will undoubtedly be an interest rate hike. However, people will be seeking for reasons to be bullish and will certainly misinterpret a dovish narrative coming from the Federal Reserve.
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We’ve been playing this game for a while, as hope burns eternally. Nevertheless, industrial demand for silver is declining, and it appears to me that the US dollar will continue to grow over the longer term, despite being overbought recently.
