SILVER- REACHING KEY DECISION LEVEL
We will see in the chart below how price is getting very close to the 35.50 area and the market is having trouble finding buyers. Obvious reasons are buy low and sell high. Lets get it the charts.
XAGUSD-Silver Weekly chart
From Looking at this chart we can see that price has about $1.00 more before we touch the strong Resistance level of 35.50. If we look back to the last time we where here price quickly fell almost 900 pips. This Could be a very good Sell (short) entry trade in the next week or two. Yes Week or two.
Now one thing to watch is that if you see price touch this level this week we can in fact zoom into the Daily chart to see if we can tighten in an entry giving us a better Risk-Reward trade. But, Be careful here because it is apparent that the weekly traders are controlling this instrument. Lets look at the Daily chart.
XAGUSD-Silver Daily Chart
What we see happening here over the last 6 trading days is market consolidation. This range is a sign that the Market is deciding which way they want to go. I know that some of you may be trading this intra-day. But, not for me. Also if you look at the last two days the Bears have started to take control. What I would like to see is a final push up to touch (banks Squaring their books at the Blue S/R level) then have a nice reversal candle formation at that level to trigger a sell(Short) order.
The other option for a short is for price to break out of the range of the last six days and short at that level. I would much rather see the later which is what will more then likely(predictable) happen based on the past and the banks wanting to square the books.
So still more waiting here which is probably the most important part of being a successful trader. So set yourself two alarms one at the weekly S/R level and one at the lower band of the current range. Also, Keep in mind that silver is considered a commodity and with the global economy slowing again the demand will decrease as well as the price. Unless Apple decides to start on Iphone 6 next week. LOL. Have a good trading week.
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