The Silver Price & Broader Markets: How Will They Trade This Week?

The silver price trended lower last week after hitting a high of nearly $16 the prior week. So, what’s in store for silver and the broader markets this week? If we look at the moving averages and what is taking place in the broader markets, we may find some clues. It seems as if the silver price over the past two weeks has been moving in the opposite direction of the Dow Jones Index and the broader markets.

As the Dow Jones increased 1,800 points since January 4th, the silver price fell more than 50 cents to $15.40 on the close of Friday. If we look at the Silver Daily chart versus the Dow Jones Index (Black line) we can also see that the silver price has been trading between two moving averages:

The silver price peaked right when the Dow Jones started the second stage of its correction higher on January 4th. On the close of Friday, when the Dow Jones Index added another 336 points, the silver price fell more than $0.20 to $15.40. So, it seems as if the silver price will continue to be weak as the broader markets move higher.

But, I do believe we are going to see a peak in the Dow Jones Index and broader markets very soon, likely this week.  As I mentioned in a previous video update, the Dow Jones will probably hit resistance at the 12 Month moving average (MMA) of 24,875 before the end of January and will head down by the end of the month and continue the same trend lower in February:

So, if I am correct that the broader markets will begin to sell off, then the gold and silver prices will start moving back higher. Of course, there are no 100% guarantees with technical analysis, but we can check the markets and see how the price actions traded over the next two weeks.

Now, the Silver Daily chart suggests there is a good support level at $15.33 (25 DMA-Blue line):

However, the silver price could fall below that $15.33 level to $14.85 (50 DMA-Red line) before reversing when the broader markets peak and decline sometime in the next week or so. Because the broader markets are becoming extremely overbought and now a high risk, shown in the Sentiment Trader Report I receive daily, a reversal lower is soon to take place:

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