Potential signal
- If the silver market pulls back to $72.50, and the 10-year yield is falling, I am buying with a stop just under $70, and a target of $79.
Silver has been pretty positive during the trading session here on Thursday as interest rates have fallen a bit and that of course is a very bullish effect on the markets as silver is a non-yielding asset so of course higher interest rates are pretty toxic for silver. That being said, I think you've got a situation where a lot of traders are just simply trying to figure out what to do next and they can often use the 10-year yield as a bit of a potential signal.
If the yield starts to drop below the 4.30% level, then silver probably takes off. I do look at $70 as a major support level. The question at this point is whether or not that holds. So far, I think it does. I haven't really seen anything that makes me worry about it too much. When I say $70, I don't necessarily mean on the dot, but that general area seems to be bringing in buyers.
Yield Signals and Entry Strategies
If we can get rates dropping from here, then I think we go looking to the 50-day EMA. Looking at shorter-term charts, you start to see a picture of perhaps interest right around $72.50. So that's where I might enter. $72.50 with falling rates in the 10-year yield in America probably going to be the play I look to take advantage of assuming that it does in fact happen.
Top Regulated Brokers
If not, that's fine, I can take my time and not worry about things. I do believe that eventually we have to make a bigger decision, but I also recognize that things will be very noisy in the short term. Therefore, position sizing will be crucial. You cannot get over-leveraged here and take out a massive position very safely.
I am aiming for the 50-day EMA on that pullback and then eventually the $80 level. If we break down below $70 and rates continue to rise, silver has much further to fall.
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