By FXEmpire.com
The silver markets barely move during the Friday session as traders seemed unwilling to take a new position on before the weekend. The range was very tight, and as such there really is nothing to be seen as a signal from the session. However, we did break down below the $27 mark which was an area we had been watching for some time. It does look like we broken through the consolidation area that has been giving so much support to this market. With this in mind, we are willing to sell breakdowns as they come. We also would be more than willing to sell any rallies that shown signs of weakness on the shorter time frames.
The silver markets have been very weak for quite some time. Most of the spring and summer has been a steady decline in the value of this market. This is predicated upon a stronger than usual dollar, and the fact that the industrial part of the equation has been very weak for the store commodity in general. Unlike gold, silver can act as an industrial metal instead of a precious metal at times. We believe this is what has been going on for some time now as the world is concerned about global growth. It’s a simple concept, the lower the amount of industrial output, the lower the demand for silver – all things being equal.
Technically speaking, this pair is in an extreme downtrend and we have just broken through what should be a continuation pattern. The breaking down of the $27 level will have ran some stops, and have many other people thinking of shorting as well Erie it because of this, we feel that silver is only a headline or two away from falling even further.
While it is almost impossible to glean any kind of signal from the tepid Friday action, the simple truth is that silver has been a one-way bet since the end of February. Is absolutely no reason to buy silver at this point in time, and as such we are selling fresh lows and rallies to show weakness.
Click here a current Silver Chart.
Originally posted here
