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Silver Prices: Picking Up Loose Change in the Range, Scalpers’ Market

Silver Prices: Picking Up Loose Change in the Range, Scalpers’ Market

Paul Robinson,

What’s inside:

  • Range contain remains for the swing trader
  • Triangle broken to the down-side in line with short-term trend
  • Scalpers can look to trade along path of least resistance towards 19.20 support level

In Tuesday’s commentary it was reiterated that the range in silver prices is likely to continue for the foreseeable future, which doesn’t make for the most exciting trading environment. Our game-plan has been, and continues to be, one of patience until we reach either the upper (~20.60/75) or lower (~19.20) bounds of the range before looking to establish a trade in the opposite direction on a swing trade basis, price action willing. Should one side of the range break with conviction, then we would look for a pullback retest before possibly taking entry (More on that later…)

The middle of the range, where we live now, is left to the scalpers; those who are trading with time-frames of a few minutes to a few hours.

Yesterday, we highlighted a triangle building within the range, one which could break in either direction, but, again, given the broader range we are not inclined to become involved. The lower trend-line of the developing triangle broke to the down-side, in line with the trend of lower highs and lower lows since the 8/10 peak. For the very short-term-minded trader this helps clarify the path of least resistance in the short-run and opens the door up for a move to the low-end of the range around 19.20.

As long as the sequence of lower highs and lower lows continues, then we look to 19.47, 19.30, and 19.20 as the next levels of support. Keep an eye on the lower parallel of the trend-line off the 8/10 swing high as support, too. It would require a turn back above yesterday's high and the top-side parallel to bring the current downward trend structure under fire.

The current set-up and general environment in precious metals is best left up to those looking for scalps of a few cents here and there, as risk/reward from a swing trade standpoint continues to be unfavorable at this time.

Track trader sentiment in real-time via the DailyFX ‘Speculative Sentiment Index’, or ‘SSI’.

---Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter at @PaulRobinsonFX.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.