Sometimes in life, we always go by the principle of using Occam’s razor to work things out. It’s not so much the best thing to abide by when trading, but one of the best principles I find in trading is to always keep things simple. That is also in part what Greg tends to preach in educating new traders, that is the KISS principle i.e. Keep It Simple to be Successful.
After the sharp retracement at the end of January, silver has struggled so far for any recovery momentum in February. However, the worry now is that we might be starting to see a pattern of lower highs, lower lows start to be formed. And that is never a good signal for price momentum on any charts.
It’s still early and there is scope for things to change up in the week ahead. But if dip buyers can’t shake off the bearish pattern, it could lead to more technical trouble for the precious metal in due time. That especially now that the volatility spikes are starting to settle down. The calmer environment will allow for traders to be more level-headed in making decisions, and that also means sticking to simpler fundamental and technical analysis in conducting trades.
And so if the lower highs, lower lows pattern continues to unfold, it will keep dip buyers sidelined until a technical shift happens.
The bigger picture chart shows the next key support level for silver might be pointing to more pain in the short-term. That as the 100-day moving average is only seen at around $65.35 currently
