Near Term Lows in for Silver? | RJO Futures

May 25, 2017 3:07PM CDT

July silver is trading $17.165, about 5 cents on the day. Sometimes, it is nice to look at the long-term chart to get a clearer picture of silver contract. The chart blow paints a big picture of the silver futures contract going back to 1971. As you can see, silver made a high in the $50 area in January 1980, and again in April 2011. This also shows that trend line going up in silver after a recent low of $13.635 in December 2015. The point for all of this is that silver trades lower from these levels into the $15.00 area, and it should still be on an uptrend that started back in early 2000.

Equities are on a parabolic rise as NASDAQ makes a seven-month straight positive close not seen since Sept 2009. I was surprised to see that although “Bitcoin” was on the rise before Trump took office, it accelerated and is projected to hit $3000.0. Silver has not benefited in the same way so far, but as long as it holds its long-term uptrend bottom of $15.00, it could potentially reach that triple top shown in the diagram in the future. When will that happen? That is the big question.

In previous articles, I discussed the possibility of near-term low off the $16.00 lows. My view today is that weakness will probably be bought rather than sold. The commitment of traders with option reports (COT), which will be released tomorrow May 26, should show a little bit of pop in the holding of the non-commercial and non-reportable positions!

I will repeat it again, from a technical perspective, nothing changes in regard to my opinion that we are "getting less and less bearish as prices continue to decline into weekly support lines.” Frankly, $16.00 had better hold, or else more price pressure to the downside will happen as the result of discouraged bulls abandoning the market. However, any sustained close above lows $17.00 will probably start a momentum run to the upside. It will set up a higher low against the December 2016 low signaling near-term lows.


Silver Monthly Continuation Chart

Silver Monthly Chart

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