Initially, silver attempted to rise during the course of the week, but the same downtrend line continues to act as a difficult barrier. As the market has been hammered by a strengthening U.S. currency, I believe there will continue to be a significant amount of bearish pressure. In this environment, I feel it is likely only a matter of time before the price reaches $18. In light of the fact that both interest rates and the US currency operate against any form of optimism, I feel that silver has only one path in the intermediate term.
In addition, you must bear in mind that silver is both an industrial and a precious metal, so you must be aware that the overall “slant” of the market is downward, so this would be a continuation of what we have already observed. At this time, I feel it is more likely than not that we will continue to observe a “fade the rally” strategy in this market.
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I am aware that markets will continue to exhibit a great deal of erratic behavior, but silver is especially susceptible to this. Due to this, I believe that it would be prudent to sell short-term rallies on smaller time frames, as the weekly chart may not provide sufficient “runway.” I believe we will eventually fall below the $18 level and begin to investigate the $15 level. This does not imply that it will occur immediately, but it is highly probable at this time.