Silver: Continuing to Find Support Near $17 - 17 May 2016

Silver markets had a very volatile session on Monday, as we had initially rallied right off the bat. However, we found quite a bit of resistance near the $17.50 level, causing the market to turn things around and form a shooting star. The shooting star of course is a very negative candle stick, and that should cause a bit of concern. However, the Friday candle was a hammer and at a spot that we have seen quite a bit of support recently, so I believe that the market is going to continue to be choppy in this area but should continue to find support near the $17 handle.

Multiple support levels

I also see support down at the $16 level as well, and quite frankly just above it. In other words, I have no interest in selling silver, I feel that it’s only a matter of time before we continue to go higher. I think there’s 3 different scenarios to look at when it comes to silver markets and whether or not to start buying. The first one, is a simple break above the top of the shooting star from the Monday session which is always bullish. Secondly, we could find a supportive candle near the $17 level, and perhaps even a little bit below it. Lastly, I believe that a break down to the $16 level would offer quite a bit of value that people would be interested in. A supportive candle in that general vicinity would be reason enough to start going long.

Keep in mind that the value of the US dollar will have a massive effect on what happens in the silver markets, and as they are starting to heat up, quite often the US dollar will have made that move happen by falling. Keep an eye on the US Dollar Index, and if we break down below the 94 handle, I believe that silver will continue to go much higher.

Silver

Christopher Lewis

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.