Silver Futures Index $SILVER (SILVER)

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Silver Continues to Squeeze Short Sellers
By: Christopher Lewis | May 17, 2024

• Silver markets have shot straight up in the air again during this past week, as we continue to see a massive, short squeeze in this market.

Silver Markets Weekly Technical Analysis

Taking a look at the Silver Weekly chart, you can see that we’ve shot straight up in the air during the week, and now it looks like the short squeeze is on. Now the question about these short squeezes will always be the same, and how long can it last?

Well, looking in the past we’ve seen Silver rocket to $50 once it’s cleared $30. But it also tends to correct very viciously at the same time. So, when you do get a pullback, it’s going to be pretty ugly. Because of this, I would implore you to keep your position size reasonable. Sometimes a market just gets so far ahead of you that you just can’t be bothered with it.

It’s not worth it in the long term. Ultimately, I do think that the $30 level could be support. I also recognize that the $28.50 level could be support longer term. You know, we’ve seen the silver market go looking to the $50 level when it breaks through this region. The biggest problem, of course, is going to be that silver markets are based on futures contracts, which are paper contracts.

And for a long time, there’s been an issue with people nakedly shorting an asset that they don’t have. And with more signs than there actually is in the world. Because of this, I do think we have a nice run here, but I also recognize that typically silver will punish traders who start chasing on these wild moves too recklessly. So, by all means, please, if nothing else, be cautious with your position size.

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