The silver market has jumped above the 50-day EMA on Monday, as traders continue to look at this market overall. That being said, this is a market that is also trying to heal from a horrific selloff.
Silver
The silver market has jumped above the 50-day EMA, breaking above the $80 level. All things being equal, short-term pullbacks offer buying opportunities from what I can see, with the $70 level offering a bit of a floor. Whether or not silver can continue to the upside, then we need to see the US dollar really crumble.
The US dollar has been soft during the session on Monday, but a lot of this comes down to speculation about the Federal Reserve and quite frankly, I think a lot of that speculation could prove to be wrong or at least not as right as they think. After all, I've seen a lot of different calls in the market over the last couple of months about how the US dollar was going to collapse. Generally speaking, we reach a little bit of a fever pitch and then something comes across the wires, and everything gets slammed down.
Consolidation and Market Recovery
Keep in mind, silver did rally quite nicely while the US dollar was rallying as well. So there are other factors in play obviously. But one thing that's hard to get your head around is two Fridays ago we had that horrific candlestick and at one point in time were down something like 33% in the market.
A day like that leaves lasting scars on a market. So, I think it's going to take some new directive or news to make silver break above the $90 level. I think we're trying to find consolidation. And quite frankly, consolidation is the most bullish thing you can see in this environment right now.
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