The May silver contract has forged a noted range up move to start the US  Thursday morning trade. With a long list of outside market influences positive to start this morning, one gets the sense that a risk on vibe has returned and given the magnitude of the washout in silver prices since the late February highs, part of the gains this morning could still be technical short covering action. However, the markets were tossing around rumors of PBOC easing and with Brazil cutting interest rates overnight by a rather aggressive 75 basis points, the bull camp would appear to have the benefit of monetary policy views. Silver will probably show some reaction to US claims figures this morning, but with the trade seemingly anticipating something positive from the Greece debt swap situation, the claims data might be relegated to a back burner status. However, silver and other physical commodity markets will eventually see the claims and Challenger layoff news as a key indicator for prices over the coming 36 hours of trade because of the looming month US payroll report on Friday morning. Just to throw in another positive, the bull camp is probably drafting some buying support from renewed strength in the Euro, especially if the Euro remains strong into the close of trade in Europe today. Comex Silver Stocks were 127.874 million ounces down 3,172,266 ounces. Stocks have declined 11 of the last 20 days. A bullish track is in place this morning and the silver market is likely to benefit from a combination of technical short covering and from outright fresh buying. Just a normal retracement off the February/March washout gives a.38 target of $34.43 but if the US equity markets manage to add to their initial gains through the Greek swap deadline and through the flow of scheduled US data, we wouldn’t be surprised to see May silver manage a rise up to $34.565. Critical support in the May silver contract moves up to $33.82 today.

Technical Analysis

COMEX SILVER (MAR): The cross over and close above the 40-day moving average indicates the longer-term trend has turned up. Momentum studies are declining, but have fallen to oversold levels. The market’s close below the 9-day moving average is an indication the short-term trend remains negative. It is a mildly bullish indicator that the market closed over the pivot swing number. The next downside target is 3254.9. The next area of resistance is around 3376.9 and 3402.5, while 1st support hits today at 3303.1 and below there at 3254.9.

StockMarketNews Research Team