Silver Forecast: Tries to Find Buyers

• Silver rallied slightly during the early hours on Wednesday as we continue to see a lot of volatility in this market.
• Quite frankly, the silver market is extraordinarily volatile under the best of circumstances, so you do need to be very cautious anytime you get into it.
• Position sizing will be crucial as long as we have so much uncertainty, and I think uncertainty is going to be a main feature of this market more than anything else.

All that being said, the market is likely to continue to look at the momentum as the main driver, and the fact that we have broken above the crucial $30 level previously does suggest that there is a certain amount of buying pressure out there that should continue to be a major force. Keep in mind that silver is extraordinarily volatile under the best of circumstances, and when we have markets like this, things only get crazier.

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Position sizing will be your friend

Position sizing is crucial when it comes to the silver market, because quite frankly, when it goes against you, we can go against you in horrific ways. The silver market is not only volatile, but the size of the contract is also very large. Because of this, you need to be very cautious with how much silver you are buying, but it certainly looks like we could be in a scenario where silver will be very violent, as we had gotten so overdone. We could rally from here, and if we recapture the $30 level on a daily close, I do think that is an extraordinarily bullish sign that people will pay close attention to. With this, I remain bullish overall, and I recognize that you have a situation where even if we do fall from here, the $28.50 level would be the next support level.

At the $28.50 level, we had previously seen a lot of resistance, and now it looks like we have the 50-Day EMA. This is a technical indicator that a lot of people will be paying close attention to, and as long as we can say above it, I think you have to look at this through the prism of an uptrend.

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