Silver
Silver has been very noisy to say the least, mainly to the upside obviously during the month of January as well as several months before. All things being equal, this is a market that I think is going to continue to see a lot of noisy and bullish behavior, but a short-term pullback from here then opens up the possibility of finding value in a market that has essentially just exploded to the upside.
On a Move Above $100
Breaking above the $100 level of course was obviously a very big deal and a lot of people paid close attention to it. If we were to break down below the $100 level, then we could see a deeper correction and it wouldn’t surprise me because quite frankly, we haven’t seen this type of action in decades and obviously have never seen this price level in silver.
There is a huge noisy sideways action area between the $70 level at the bottom and the $80 level on the top of that range that I think a lot of people be watching to see if we can get some type of support. Anything below $70 could be rather ugly, but ultimately I think you’ve got a situation where even if you did see that, despite the fact that it would be very destructive to most accounts, it still wouldn’t change the fact that we are still in a very bullish market.
Market Outlook
All things being equal, I do think that silver goes higher eventually, but sooner or later gravity has something to do with reality and then we will find buyers to try to find cheap or value in the silver market.
As far as a target is concerned, we are probably looking at the $120 level as the next target, but I think you’ve got a scenario where it could be noisy along the way. I literally think each and every pullback at this point in time just continues to attract more buyers until something fundamentally changes. Silver will be very noisy and very dangerous, but clearly you can only buy it and certainly not short it.
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