EDITOR'S NOTE: A market gap toward the upside can be considered a bullish technical sign as silver markets recover from their near-term slump. If you’re not familiar with gap openings, it means that the market opened up higher than the previous day’s close, indicating a sharp surge in buying pressure. What you want to pay attention to from this point on is the volume. There was tremendous buying volume five days ago when silver topped out above $27 an ounce. The white metal pulled back sharply the next day, but the selling volume wasn’t very convincing. So, is bullish demand just accumulating under the surface, ready to blow past the $27 level and toward its 9-month highs? Check the FXEmpire article below for their breakdown of the current price action.
Silver markets have gapped higher to kick off the trading session on Thursday as we continue to recover from the massive selloff. Whether or not we continue is a completely different question, but right now it certainly looks as if we are going to try to.
Silver markets have gapped higher to kick off the trading session on Thursday to break above the $25.50 level. At this point, we can break above the highs of the Thursday candlestick, I think we will try to recover silver pricing overall. The $26.30 level is an area that I am paying close attention to, and therefore I will be looking at that as a potential target, or perhaps a place to see a significant breakout.
Source: FX Empire
Looking at this chart, you can see that we had pulled back rather sharply, so the bounce should be very similar. It seems as if the silver market is trying to build up momentum, which is one of the things that this market thrives on, the unbridled momentum that can be released at times. The markets will continue to be very volatile, but that is the normal state of things with the silver market. Pay attention to gold, because the two markets do tend to move in the same general vicinity and direction, and that is something that we need to pay close attention to.
The market will continue to be one that you need to be cautious with, but that can be easily overcome by proper position sizing. Because of this, I think it makes sense that we would spread more of our trading capital to the gold market and a little bit less to the silver market. If we were to turn around a break down below the $24.50 level, that could be it for silver as far as an uptrend is concerned.
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