- Silver surged to new highs early Thursday before reversing into a potential shooting star, raising double-top concerns.
- Weak volume is a caution, making the market risky to chase or short as upcoming sessions may determine direction.
Silver initially rallied during the early hours on Thursday to make a fresh new high as the rally in silver has continued to show immense strength. That being said, we have turned around to form a bit of a shooting star, and I have to ask whether or not we are getting ready to form some type of double top. Ultimately, this is a market that will continue to be noisy and one that you need to be very cautious with.
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That's not a huge surprise, due to the idea that the silver market is always one of the noisier markets. And of course, there is a little bit of a fever pitch at the moment when it comes to precious metals overall. The question at this point is going to be whether the market will continue to push higher or will finally look at this as potential exhaustion.
I am a Bit Skeptical
I am still a bit skeptical about silver, mainly due to the fact that volume has not been that great. I am very concerned about silver at this point, and ultimately, you need to be very cautious with your position size. You also need to be cautious with the idea of the market going straight up in the air over the last couple of days, which isn't necessarily the healthiest of situations. You'll notice that the previous high had much more volume and, in fact, roughly three times the volume that we see here. This tells me that we are in the midst of potentially making a double top.
If we break below the $51.50 level, I think that is a really good sign that just happened. If we break above the highs of the day on Thursday, then obviously that's very bullish. But really at this point, this is a very dangerous market. You don't want to chase it all the way up here, but you don't necessarily want to short it either. The next couple of days should tell the tale, but right now, at least from a volume perspective, we might be in the midst of making a double top.
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