Silver trade – The question on the trade is, will the resistance at 17.50 hold as buyers test this level?
I am a technical trader and this is an area of resistance where the buyers have previously shown commitment in breaking through to new highs. I am not profit taking at this time unless sellers step in to move this market down, which is completely possible.
Reversal at $17.50, the reason we might see a reversal at this price level would be the distribution of institutional block trades expressed at 16.15-16.30 . There were market maker buys at this level with open contracts in the 9000 contract range. This means that if this was for mid term profit taking the expressed contracts would be executed in the 17.50 to 17.20 range. IF is the key. A single execution of these contracts would bring the market back under 17, so I am expecting them to be distributed (sold) over a three day period to keep the market moving up and increasing their profits.
Continuation at 17.35-50, if market makers (institutional buyers) step in with blocks in this range then I am watching for the extension of this buy to 18.30 – 18.47 with distribution to occur in this area.
We are in a longer term consolidated range which the institutional players have been running stops and taking the profits out of the market. It is a volatile range with quick sells and a lot of fishing of small players out of positions.
Correlations have changed across the board. The dollar index is unhooked from the precious metals trade but could gain pressure if it hits support and turns.
Silver is high risk trading in the futures markets, and has the highest number of margin calls. There are many ETF’s with double and triple leverage available. REMEMBER ONLY TRADE WHAT YOU CAN AFFORD TO LOOSE. Always manage your risk first, if you don’t know what you are doing, do not play.
Support at 16.85 and 17.10