Silver Fighting to Hold

September 7, 2018 8:13AM CDT

December Silver is trading $14.19, down 3 cents on the day. With the US dollar pulling back in the past few sessions, with a hefty net short non-commercial position from the most recent COT (commitment of traders with options report). Silver is looking for an opportunity to recover from these levels. A quick study of the Dollar index chart on the weekly time frame, suggests that that the index is poised for a breakout. The move by the US dollar from these levels could significantly impact the silver market.

The last e-view, I mentioned that silver is “showing -inside-week- price action.  A breakout out of these levels is needed to get a follow-through price action.” The breakdown from that inside chart formation took silver to test $14.00. The question is how much would market participants push it before it pops again?

With the Fed signaling to not to raise rates near term and China threatening to counter any tariff imposed by the US, traders hoping to capitalize on geopolitical risk type of run to the upside had to be disappointed that market is not reacted positively as well.

Technical perspective, the chart damaged done to the silver market has been severe in that as seen below, you see silver is heading to double bottom with 2016 lows. The market would likely dip below $14.00 for washout type of price action before it holds this level for a considerable time. Markets don’t tend to blow through weekly support as one might expect. Sideways price action is likely for near term.

Silver Weekly Chart

Silver Weekly Chart

RJO Futures | 222 South Riverside Plaza, Suite 1200 | Chicago, Illinois 60606 | United States
800.441.1616 | 312.373.5478

The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that RJO Futures believes to be reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgement at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades.

This material has been prepared by a sales or trading employee or agent of RJO Futures and is, or is in the nature of, a solicitation. This material is not a research report prepared by RJO Futures Research Department. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions.

Distribution in some jurisdictions may be prohibited or restricted by law. Persons in possession of this communication indirectly should inform themselves about and observe any such prohibition or restrictions. To the extent that you have received this communication indirectly and solicitations are prohibited in your jurisdiction with registration, the market commentary in this communication should not be considered a solicitation.