- Silver rallied a bit during the early hours on Tuesday to fight back against the massive selling pressures of Monday.
Silver
Silver rallied a bit during the early hours on Tuesday in what would have been an extraordinarily strong session, but when you compare the way that we sold off on Monday, it is a strong bounce after a massive sell-off, meaning that it’s likely this was more or less a recovery rally.
With that being the case, I think you've got a situation where traders are trying to get the upside momentum going again, but nobody really knows at this point whether or not they can. I do think you have a situation where the market might just spend some time going sideways more than anything else, and if it does, that would actually be healthy.
It would be the market doing everything it can to stabilize and have people accept the current range of prices. This is a market that has obviously been overdone for a while, and it does make a certain amount of sense that we either get a pullback or we try to find the next range.
Volume and Liquidity Will Be Sparse
But at this point in time, the other thing that comes into the picture, of course, is the fact that it's the end of the year, and volume as well as liquidity will be sparse to say the least. Where we go next is difficult to tell. I do think eventually we get some type of vicious sell-off because, quite frankly, when you look at the chart, you could see Silver drop all the way to $60 and it would still be in a healthy uptrend.
So sooner or later something has to happen, gravity has to make an appearance again, but as things play out right now, it certainly looks like it’s more or less trying to find its footing.
I suspect that the smartest move of all is probably to avoid Silver between now and next year as we have a very thin week ahead of us. But, if you do see it pull back and bounce, it could end up being a nice entry, you just have to position size accordingly.