I don't think this is a market that will be easy to deal with in the short term.
Silver
The silver market has been noisy over the last several weeks and negative during the Wednesday trading session. I think you have a situation here where the $90 level continues to be very important and until we can break above there cleanly, then I don't think there's any real hope of the longer-term uptrend continuing.
Looking for a new norm
In fact, I'm starting to have thoughts that maybe silver is in the midst of trying to find its norm. If that's the case, we may see a lot of sideways action and compressed volatility eventually, but right now I think thinking volatility is going to disappear in just about anything is a bit of a surprise.
If we were to turn around and break above that $90 level on a daily close, I think it might be worth having another go at getting long of this market as it would probably head towards the $100 level. Anything above there opens up the possibility of a bigger move.
If we break down from here, the 50-day EMA sits just above the $80 level, which of course is a large round psychologically significant figure and an area that's been important more than once. Breaking down below there opens up a move down to the $70 level, which I think is the bottom of the overall range.
I get emails all the time about silver and when is it going to start going parabolic again and quite frankly, I don't think it's going to. I think that is a situation where we have completely taken the air out of the bubble. I think the best thing that we could do at this point, we will probably be better off if silver does in fact calm down.
During the session on Wednesday, it's down over 4% and that's not a good look, but considering what we've seen recently, it's probably not a huge surprise either. I don't really want to short this market, but I think buying a dip for a short-term and nimble type trade might be potentially the way to go. I'll be watching $80 very closely.