- Silver has continued to be a headache for analysts around the world as it's very difficult to get your hands on what is essentially a “slippery fish.”
- What I mean by this is that every time it looks like it's going to do something specific, it has a wild day, as we have seen on both Thursday and Friday.
- I do think at this point in time, we are getting a little ahead of ourselves, but I could have just cut and pasted that in my analysis for the last 3 months or so.
Ultimately, I do think the $90 level causes a lot of psychology to come into play here, and really, I think sooner or later, probably going to try to get to $100. The physical silver short squeeze is a very real thing; there is a lack of silver around the world, but what I find odd is that it's always been the case. So, it matters now, I think, because of AI and breaking the $50 barrier, I think, really opened up the floodgates.
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Ultimately, I look at pullbacks as potential buying opportunities, and I recognize the $80 level as a potential short-term floor. I'd love to see silver come back and buy it on a dip, but the one thing that I do fear for a lot of retail traders is that they tend to use silver recklessly in the sense that they don't understand just how highly levered silver is in comparison to something like gold.
Managing Leverage and Risk
Because of this, a 7% drop in a single day, which has happened multiple times on the way up here, can wipe out an account. That's the lesson here. While it's obviously a very bullish market, you don't want to “bet the farm on it.” You want to ride the wave. It's a totally different thought process.
And I do think we will get $100 eventually. The question is, how levered are you going to be? Are you going to have an account? Because we could drop to $80 and wipe out a lot of retail traders, but when you look at the chart, it's not a huge drop. We could drop to $70, and I could say the same thing. Yes, it's a $20 drop, but all things being equal, considering where we came from, that's not that far. So, by all means, make sure your position size is appropriate.
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