Silver popped overnight last Wednesday, hopping from 16.50 to 17.00 overnight to our view here in the U.S. Since then, it’s been sideways, but with each day closing above the open – and with good volumes – one has to think the silver bull might be here.
Let’s take a look at a chart. Here’s the daily candle chart for SLV, the biggest unleveraged silver trading ETF on US markets.
(credit Fidelity.com)
The first thing that strikes you is that we are in “uncharted” territory indeed. It’s been a while since silver was at these price levels, June 15, 2018, to be exact. So maybe not that long ago, it’s only 14 months. But it sure feels like a long time ago.
One interesting thing that jumps right out is that silver seems to need 2 or 3 attempts to break above a whole-dollar price level. We’ve drawn thick green lines across the whole-dollar equivalent price points (for international silver prices vs SLV), and you can see there were 2 tries each time at 14 and 15 before silver finally broke through on the 3rd try.
The whole-dollars seem to be good for support levels though.
So the question boils down to this: Have the two little pokes above the current whole-dollar level been enough to “qualify” for 2 attempts?
To these weathered eyes, the answer is No, because we haven’t seen a close above the level yet. So while we may see a pop above the level, it’s likely to be a short-lived pop, and we wouldn’t be surprised to see silver settle down either to- or below- the 16 level on the SLV chart.
Short-term momentum does look positive – 4 straight days of green candles on good volumes is no joke. But we’d still advise keeping your trading on the small- to medium-size though, with thoughtful stops. You have to be in the market to make money in times like this, and a touch of care can often return profits while others are losing money.
Signed,
The Gold Enthusiast
DISCLAIMER: The author has no position in any mentioned security. The author is long the silver sector via small positions in AGQ, PAAS and SVBL. He may daytrade around these positions but has no intentions of trading out of these core positions in the next 72 hours.
