Chicago- CME Silver traders showing decreasing commitment in futures market.
Silver has been in a very tight consolidated trading zone with a smaller range on the weekly charts. As price breaks below 19.50 we see there are no large buyers entering the market on the Silver futures contract. The volume on silver has also dropped off as institutional traders and large traders have decreased their holdings. Silver has been in distribution since mid 2011.
The next level of support for Silver is 14.80 to 17.50, although this is a wide trading range we can see that the previous price action bounced from this area to start the run up in September 2010 that led to the parabolic move up in 2011.
If silver does break through the resistance at $21.00 the next upside targets will be close to $25.00 . The chop (moving from support to resistance back and forth) has been exhausting for most traders as they are looking for the break out in this extremely tight range.
Silver can be very volatile and since there is light volume be very careful as it is easy to shoot out stops.
Never trade Silver unless you are using purely risk capital. Silver has many margin calls on positions that aren’t monitored.