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Profit from the Silver Pullback

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https://www.tradingauthority.com/article/how-traders-can-profit-silver-pullback
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How Traders Can Profit from the Silver Pullback

Sometimes the talking heads and pundits in the media don’t let facts get in the way of the financial narrative they want. Their daily drive for drama intentionally plays on traders’ emotions for audience ratings. Watching, listening or reading the often-misguided over-analysis of happenings that drive markets is entertainment designed to make you tune in… not to profit.
A perfect example is the effect the news has had on the silver market recently. But, with silver prices dropping, it presents new buying opportunity for long-term commodity investors.
While many good information sources that play it straight do exist, some have an agenda and ideology that almost prohibits an objective view. The hype around short-term events for viewers devalues long-term planning and investments. Unfortunately this transfers fear through osmosis, prohibiting clear, unbiased decision-making— all in an effort to make sure you return for more.
The conversations about a double-diprecession, government default or Dollar demise are economic possibilities, but not probabilities at this time. Fiscal issues must be addressed, but the market action is telling a more optimistic story. In early May the stock and commodities markets were at multiyear recovery highs. When and if the market direction changes will just mean additional opportunity.
Can’t Dive Below 335
Major profit-taking sales in commodities from the May 2 high point has seen asset unwinding back to the January breakout point. The Commodity Research Bureau Index (CRB) of resources as a whole has dropped 10% in the mid May to the key technical 335 area, which was a halfway recovery of the 2008 extreme highs to 2009 extreme lows. As a trader, this news is a potentially bullish buying area for a number of markets that are now near long-term uptrend supports. The reward-to-risk is much more attractive at these levels for continuation of global demand growth.

The overall basket of commodities has been in an overextended, yearlong strong upward trend. One of many major pullbacks, the last few have been bullish buying opportunities, which encouraged top pickers to go short. Timing a major market reversal is nearly impossible and almost always a gambler’s ruin.
Buying against support and trend levels has been successful in the past. A close below the 335 halfway 2008-2009 recovery point on a weekly basis would get attention and renewed evaluation of the trend. It is definitely too soon to make that call.
Silver Sliver
A solid example of retracement to support is in the oft-emotional Silver market. Too far and too fast caught up with long traders who overstayed their welcome when danger signs flashed brightly. The unwinding triggered built-up exit stop losses that were protecting profits for most.
The explosive run to highs near $50 an ounce had begun with a breakout above the key $30 cap on prices in February. Attempts were made in mid- and end of December, with the actual never-look-back bust-out coming a few months later. The uptrend is still intact, and the recoil to the original level needs to be watched for a halt in the current decline.

Now that the luster is diminished in Silver, it becomes an attractive potential play.