- The silver market has plunged on Thursday, as we are now watching the $70 very closely in the futures market.
The silver market has plunged again during the trading session here on Thursday as we continue to see a lot of questions asked of what happens next. After all, last Friday we had seen a horrific drop, and I have mentioned a couple times recently that those bars don't typically happen in a vacuum. That means something has fundamentally shifted.
Whether or not silver becomes a bearish market is a completely different question, but it's obvious to me after today's price action that the $70 level is extraordinarily crucial for support. If we can stay above the $70 level, then I think we have a chance of maybe trying to build a little bit of a base, maybe some sideways action before we turn things back around.
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Crucial Support at $70
On the other hand, if we were to break down below the $70 level, then this market could drop to $60 rather quickly, followed very closely by the 200-day EMA at $55. Keep in mind that silver has been completely disjointed for a while, and I think this is a situation where you need to be very cautious.
The biggest thing that you need to keep in the back of your mind in silver trading is that you need to be small with your position size. This is not the time to try to be a hero, and I shudder to think of all of the retail accounts that just got absolutely blasted by the candlestick on Friday.
If you have managed your position well, then hopefully you got out with at least some positiveness, but really at this point in time, I think you're going to see a lot of choppiness and sideways action waiting for the next impulsive candlestick.
There is still a silver shortage, but there are also major problems when it comes to refiners. They simply can't keep up with the cost of carry, those types of things. I think silver has quite a bit of rockiness ahead of us, and the action on Thursday is just another day in this market. Keep an eye on $70. It will matter.
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