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We're Seeing a Blow Off Top in Silver

If you haven't been paying attention, Silver has been on quite a tear lately.

Here's a daily chart of silver futures:

slv

The chart also has Bollinger Bands, which show us when a market is seeing movement larger than normal.

And for three days in a row now, silver has been above its upper Bollingr Band. That defines a parabolic move, and often it is a blowoff top.

That last candle?

Silver moved from 19.84 and hit a high of 21.22. 7% in a single day.

That in and of itself is interesting, but here's the kicker...

... that entire move happened during a 3-day weekend, not regular trading hours.

When we see a big move like that and it's not during a normal market session, we tend to see yet another attempt of those recent highs. I wouldn't be surprised if it cracked back above 20 this week.

Into any short term strength and I'll be looking to fade it.

Keep in mind, this is a short term trade. If we look at where silver sits on a longer term basis, this is probably the start of a new trend higher.

silver-weekly

Timeframes matter. Short term, I'm bearish and it's worth a look to take the short side.

Yet into any weakness that feels like the bulls giving up, then it's worth a look to start a new longer term position and play for the move into the 27 level.

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by Steven Place

Steven Place is the founder and head trader at investingwithoptions.com/