- Silver has fallen a bit during the trading session here on Tuesday, as perhaps we’ve gotten a little overdone to the upside, which I think is pretty obvious at this point.
- But there will be people willing to chase it all the way up here. Just make sure you’re not one of them. Yes, it could go higher from here.
- But the reality is that there’s only so much momentum that can head into them under normal circumstances.
So it is very important that you don’t get too aggressive after a move like this. You have flat out missed the move to the upside and that’s fine. It happens all the time. What you look for is a pullback towards support or sideways action. And we will more likely than not see one or the other over the next several sessions.
Shorting is Dangerous
So, with that being said, I think you have a market that is long only, but you don’t want to be the FOMO trader that comes in and wipes out your account with a huge position seeing dollar signs in your eyes. I do think that silver probably continues to see a lot of upward pressure due to the fact that I think a lot of traders are looking at inflation.
It’ll be interesting to see what the CPI says on Wednesday, and that will most certainly have a major influence on what happens next. That being said, I do think that any dip at this point in time will end up being a nice buying opportunity and offer value. Really, it’s not until we break down below $33 that I would even entertain the idea of the trend being done. Historically speaking, once you break above the $35 region, Silver has a long history of taking off to the upside in the two other times that we’ve seen that happen. Regardless, this is a market that you don’t short.
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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
