Silver Hits Reaction Zone Following Intense Mean-Reversion Selloff
Silver futures are hovering around $98.22 after experiencing a significant corrective decline from a peak of approximately $121.78. This movement aligns with the VC PMI framework, indicating a typical mean-reversion cycle transitioning from the Daily Sell Zone back towards relevant Buy levels.
Current Market Assessment
Recent pricing activity shows silver testing a critical threshold just below the Daily Buy 2 level, which is set at $99.03. The market session observed a low near $95.12, placing it within a high-probability reaction zone. This zone often triggers short-covering and creates tactical long positions.
The VC PMI analysis indicates that the Daily Mean, which resides around $114.21, acts as a significant upward force. This suggests that despite recent declines, the market remains in a corrective phase rather than entering a renewed upward trend.
Support and Resistance Levels
- Daily Buy 1 is positioned at $106.63, and its breach contributed to intensified downward momentum.
- The Weekly Buy 1 level rests at $93.14, representing essential support should market volatility increase.
Technical Outlook and Projections
Analysis utilizing Square of 9 geometry supports the observed trends. The decline from $121.78 aligns with a rotational move toward a price range of $95 to $98, correlating with both harmonic square levels and cycle symmetry present in the active 30- and 60-day timelines.
Upcoming Cycle Dates
The current downward trend indicates a short-term inflection window expected between January 31 and February 2, 2026. This period may see prices stabilize at a reaction low or potentially accelerate into a more significant decline.
A secondary momentum window is anticipated from February 6 to February 9, 2026, which may prompt mean-reversion attempts towards the Daily Buy 1 and VC PMI Mean levels. Should prices remain contained through mid-February, a more extensive month-to-month cycle turn is likely projected for February 14 to February 18, 2026.
Price Stability and Future Implications
Maintaining prices above $98.00 to $99.00 during the January 31 to February 2 window could enhance the chances for a mean-reversion rally towards the Daily Buy 1 at $106.63 and possibly up to $114.21.
Alternatively, if prices dip below $95.00 in the same period, this could lead toward the Weekly Buy 1 at $93.14, completing a full weekly cycle rotation.
Momentum Indicators
Momentum indicators, particularly the MACD, indicate early signs of potential downside exhaustion. The histogram’s contraction suggests a developing divergence, hinting at the possibility of a short-term rally. However, confirmation will hinge on a close above the resistance band of $102.24 to $106.63.
For traders, it’s vital to note that this analysis serves educational purposes only and does not constitute financial advice. Always seek insights from a licensed financial advisor before executing trades.
