By FXEmpire.com
The silver markets fell again on Monday as the Dollar continues to gain overall. The market has recently broken below the support level at the $30 level, and this signaled to us that the market was ready to see a major selloff. The silver markets aren’t going to get a pop as long as there are serious amounts of concern for the global economy. The softening of demand in the industrial sector will weigh upon this commodity going forward.
The breakdown below $30 signaled us to sell only, and the last few sessions after that formed a couple of hammers to show signs of a bullish attempt to support the falling market. However, the price action for Monday shows that the breaking of the support level – or bottom of a supportive hammer on Friday – signals that the support is continuing to crumble as we report this. The market looks as if we are entering a “sell the rallies” type of scenario, and the fact that the session is closing at the very bottom of the daily range suggests that we have further to fall. The $26 level looks to be the next serious support level for this market.
The bullish case is almost impossible to imagine at this point as the industrial demand continues to wane overall. The silver market has continued to fall over the last couple of weeks, and the bounces at this point will more than likely offer nice selling opportunities as the traders who have missed the move will look to jump in as well. The $29 level is the first potential resistance level above, and weakness there would be sold by us. The same can be said for the $30 level too, as it is a bigger level overall.
The breaking of the lows of the session for Monday will see us adding to shorts, and should bring in fresh selling to accelerate the bearish trend for the next $2 or so. The market would have to close well above the $30 level for us to even ponder the idea of buying.
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Originally posted here
