Chicago- CME Silver traders showing decreasing commitment in futures market.
Silver has been in a very tight consolidated trading zone with a smaller range on the weekly charts. As price breaks below 19.50 we see there are no large buyers entering the market on the Silver futures contract. The volume on silver has also dropped off as institutional traders and large traders have decreased their holdings. Silver has been in distribution since mid 2011.
The next level of support for Silver is 14.80 to 17.50, although this is a wide trading range we can see that the previous price action bounced from this area to start the run up in September 2010 that led to the parabolic move up in 2011.
If silver does break through the resistance at $21.00 the next upside targets will be close to $25.00 . The chop (moving from support to resistance back and forth) has been exhausting for most traders as they are looking for the break out in this extremely tight range.
Silver can be very volatile and since there is light volume be very careful as it is easy to shoot out stops.
Never trade Silver unless you are using purely risk capital. Silver has many margin calls on positions that aren’t monitored.
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Gold trading make or break price action.
Gold buyers have been very weak in this move up. Although the US and world markets this week have mostly seen a correction. As you can see in this chart of NUGT which very sensitive and volatile compared to gold futures prices, we have created a bear flag. This means the market has sold from $60 to $33 a share then recovered back to 43. We are not seeing any commitment on the buyers side and as you can see the supporting trend line is about to be tested as sellers have moved in and could be taking control again.
On the sell side the targets we are looking for is $33.95 this will be initial support on the move down. It would not be unusual to see it Chop in this area from $33-39 with highs to $43. If support holds here at $398 then we would be looking fro a continuation to $44 and then a further move to $49 which is the 200MA or the 200 day moving average.
There are many outside variables effecting gold pricing. What goes on in the Ukraine this next week could be more of a determinate than the correction in US stocks. We shall see.
Trading Gold, Gold miners in either futures or ETF’s is extremely volatile. Do not trade it unless you have spent time studying the charts and have risk capital. Risk capital is money that if lost will not hurt your financial future. For many people buying and holding physical gold is an easier position as it normally turns out to be a long time hold.
Trade at your own risk level.