- Silver touches off on resistance and pulls back
- A set of short-term parallels offers traders a structure to operate off of
- Expectations for extended moves remains low
In yesterday's commentary , we looked at the strong move in silver prices above a short-term trend-line and touch of resistance around the 20.50 level. Silver found resistance at the first noted level and has since pulled back a bit, which leaves us with the question of whether it is simply a small pullback before seeking higher levels, or if it is the beginning of a move back down towards the 19.20 support level and the continuation of a broader daily range.
Since touching off on support at 19.20 on 7/20 there is a series of higher highs and higher lows developing, visible on intra-day time-frames, but it's certainly not making for a very strong trend - not much is right now. Vol is low these days, and as such, looking for extended moves has been disappointing.
That aside, a decline to the lower parallel (~19.85/90) created during the past week could present another short-term dip-trip for a push back to the 20.50 level seen yesterday, or better. A break below the lower line would then strengthen the notion we will see a decline towards 19.20, and thus, at the least, a continuation of a broader daily range.
We will continue to watch the positioning of large speculators in the futures market, as a decline from record long holdings along with a correction, whether it be in price or time, could help set the stage for another broader advance higher. For now, it would seem that until that happens, silver will have a difficult time pushing to and sustaining new heights.
In the immediate future the focus is on the before mentioned parallel for further guidance and from there we will take it one step at a time.
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---Written by Paul Robinson, Market Analyst
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