By FXEmpire.com
The silver markets have been grinding along for some time now. We have been waiting for a move, and on Thursday finally got it. As expected, the trend continued lower as the market broke down again. The support has been very stubborn, so there are more than a couple of moments that we can remember being doubtful.
However, the market seems to be focusing more on the industrial part of the value of silver, and not the “fear” part of the equation. Simply put, there is less industrial demand for the metal at the moment and with the global economy slowing down – it is likely to continue to weaken overall.
The recent action has been very slow, and we have remained fairly sanguine as the market simply wasn’t doing much. The consolidation was becoming very obvious, and there were two very distinct levels that we warned you about: The $30 and $27 handles. The market seemed to be “stuck” between the two.
The trend was certainly down, so we always preferred a down move if it could come. One of the biggest criteria for selling this market was a daily close below the $27 level, something we are getting as I write this. Now that this has happened, it appears the next down leg in this market can begin.
We certainly wouldn’t buy silver at this point, even though there are some analysts that suggest it is “cheap.” Remember, cheap can get cheaper. Also, there is no real support in the market until we see $25, and this level looks a bit minor at this point as well truth be known. Because of this, we wouldn’t be surprised if we eventually get down to the $20 level as it is a much larger support zone from the look of the charts.
We are going to sell right way and sell rallies as we go forward. The shorter term charts will be used to our entries, such as the hourly chart. We will not buy at this point, and would have to see the $30 level overtaken in order to do so.
Click here for updated Silver News.
Originally posted here
