(MENAFN- Daily Forex)

• Silver has gone back and forth during the trading session here on Tuesday as we continue to dance around the $50 level in the futures market.
• The spot market is about $1.50 higher, but at the end of the day, the futures market is starting to see massive volume.
• There's a huge fight going on and it's worth noting that $50 has been a very difficult level to get above. And in fact, we've only just done it for the first time cleanly.

The market goes all the way back to 79, maybe 1980 when we had originally tested this and collapsed and we've done it two times before, but possibly we're in the middle of a third time. We'll just have to wait and see. This is an ugly candlestick on Tuesday, and the volume is really high at the moment with the 115,000 contracts traded already. And we're just starting to get full action in New York and Chicago. So, it'll be interesting to see how this plays out.

This is a market that I do think needs to pull back and I think will sooner or later. There are lot of levered players in this field. So, a blow up could be coming. The spot market is a little bit under supplied at the moment and therefore that's part of what's causing this. But over the longer term, I fully anticipate that a pullback will end up occurring. And I think it's healthy. The $48 level could be an area that we would see buyers jump in underneath there to $46. Either way, I don't have any interest in shorting yet, although this is where you would do it. We just don't quite have confirmation of a shift as I record this.

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We're certainly in the middle of building it. We'll just have to see how that plays out. I do suspect that now that I'm hearing random people in the street talk about silver, literally over the weekend, we're probably closer to the top than most people are willing to admit. I don't want to hear about fundamentals. I don't want to hear about this time is different. I don't want to hear about a lack of physical supply. When you start hearing people who know nothing about financial markets talk about getting into silver, it is never a good sign.

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