RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

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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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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