For silver investors, as for gold, sentiment continues to remain very weak for the metal and the only comfort this group can take from the recent price action, is that for intraday silver speculators it has been equally difficult. The last few days of price action particularly so as volatility arrived across all the principle markets, with silver also oscillating back and forth througout each session, and ending with five consecutive doji candles on the daily chart which all closed marginally higher, before Friday’s down candle restored a degree of measured price action to the chart. Of the doji candles, it was perhaps Thursday’s which was the most significant, closing as it did with a deep wick to the upper body. The candle also provided a test of the resistance in the $15 per ounce area which failed to hold, before closing back near the open of the session at $14.70 per ounce. Friday’s price action then following through to confirm this bearish sentiment.
The volume associated with the recent rally has also confirmed the weakness of the move higher, with the rising price action accompanied with falling volume, a sure sign of a lack of participation by the big operators, with the market duly testing the platform of support now in place at $14.50 per ounce. This level is once again being tested on Globex this morning. Should this level be breached then we can expect to see a further move lower for silver in due course, and back to test the low volume node on the VPOC indicator at $14.00 per ounce. However, as we are currently oscillating around the VPOC indicator itself in this timeframe, we can expect to see further consolidation in this region.
By Anna Coulling – charts from Quantum Trading and NinjaTrader