If we were to break down below the $22 level that would of course be very negative, but even in that environment I don’t think I would be a seller because there does seem to be a lot of buying pressure underneath extending down to at least the $21 level.

• Silver fell hard early in the session on Monday as it looks like we continue to threaten the $22 level.
• I do think that the $22 level is an area that will continue to hold, and you can see that the short-term traders have already come back into the market looking to defend it.
• So, this could be a buying opportunity, but I would not get too big at the moment.

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Silver can be very noisy and therefore somewhat dangerous to trade, but having said that this is a market that I think has a pretty clear support level underneath so we will be paying attention to it. If we break above the $22.50 level then I suspect that silver might have a real shot at going quite a bit higher, perhaps reaching the 200 day EMA near the $23.20 level.

$22 remains crucial

If we were to break down below the $22 level that would of course be very negative, but even in that environment I don’t think I would be a seller because there does seem to be a lot of buying pressure underneath extending down to at least the $21 level. With all this in mind if you have the ability to take on a small position then this could be an opportunity for you.

What you will want to see is the US dollar fall a bit, interest rates fall a bit, both of which are very possible but also keep in mind that on Mondays there really aren’t too many economic announcements so there isn’t much news to get anyone excited about. Also remember Silver is an industrial metal so that is part of what comes into play as well and could be part of what’s been weighing silver down as of late but as far as structure and price go, we are still very much stuck in this huge consolidation phase, and I just don’t see how we break out of it easily. At least not without some type of Black Swan event. As we sit here at the bottom of that range it’s probably more likely than not that the buyers will return and this is a bullish market, at least for the short term.

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