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Futures Trade Desk- Buying or Selling Silver?

Daily Client Note

Global Futures Review

Buying or Selling Silver?

Trend: Mixed Momentum: Mixed Sentiment: Mixed Daily Trading Range: Extreme $2.20 (7.3%)            

Daily Simple Moving Average Lines: Blue (20 SMA) Green (50 SMA) Orange (100 SMA) Red (200 SMA) 

Technical Wave: An ABC Down structure completed a move from 41.30 to 26.20 and is now signaling that a buy-the-dip play will once again hold support. These are very choppy and overlapping charts that reveal a market that is buying support but unwilling to commit too much to breaks of upside resistance.

Silver (XAG) 4-Hour Chart

Silver (XAG) 4-Hour Chart

Buy Support: Bullish traders will be looking to buy the short reversals to 31.00 (the 50% Fibonacci retracement area of the move higher from 26.20 to 35.80), which could then target 33.00 and 35.00

Sell Resistance: Bearish traders will be looking to sell long tests that fail at resistance around 33.50 (the 23% Fibonacci retracement area of the move higher from 26.20 to 35.80), which then target 33.80 and 31.90

Overall: The main bullion moves in 2011 have been instigated by increases in margin requirements that have forced bullion markets to reverse lower to test support, and on each occasion they were announced this year. 

This Week: The pattern of buying-the-dip is likely to continue. News-headline related moves are dominating the technical potential. The trend and outlook is mixed, but many times this year buying opportunities have come from similar set-ups. The intra-day trading range is extreme and signals massive volatility remains a constant threat.