RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

July silver is trading $16.285 down, about 26 cents on the day. My previous articles discussed the potential for a further pull back. The weakness in silver certainly exceeded my expectations. It now looks like it could potentially head to the December 2016 range. From these price actions, it appears that a close above $17.50 is needed to signal a potential near-term low.

The nonexistence of bullish factors continues to put pressure on the silver market. Although the Federal Open Market Committee (FOMC) did not raise rates yesterday, the communique suggests that June rate hike is likely. Another factor that isn’t supportive to silver is the probability that the French election polls continue to favor the more predicable Macron. Those who follow the weekly Commitment of Traders with Options report should expect substantial reduction of the non-reportable and non-commercial traders. A few weeks back, these traders held a record 120K contract long. It is no surprise that most bulls probably abandoned silver for now.

Again, for now at least, silver is continuing to take a bit of breather. I’m getting less and less bearish as prices continue to decline into the weekly support lines.    

Last week I wrote, “Low to mid $17.00 range probably will provide some opportunities in my view.” Like I said, the market did exceed my expectation on the downside. For now a close above $17.50 will ignite momentum price action.  


Silver Weekly Chart

Silver Weekly Chart

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Eli Tesfaye

Senior Market Strategist
Eli started his career in the futures and options market while he was in graduate school finishing up his MBA in 2003. Eli specializes in Automatic trading strategies and systematic options trading strategies in futures market. He has been Series 3 license holder since 2005. Eli's is an avid reader, runner, and yoga practitioner.
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