RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

September silver is trading at 16.145, up about 10 cents on the day. The dollar is relatively weak, giving a lift to both gold and silver. The silver market is trying to recover from yesterday’s test of the psychological level of 16.000. As you see below in a weekly chart, silver is trading in a tight range. This chart formation suggests that a bounce is likely to take place to the upper end of the range. Crude oil is very strong, my take is that if the dollar sells off a bit here, it will lift all commodity markets in dollar terms. The silver gold ratio is sitting around 77.65 this morning. I have spent time discussing this in previous write-ups so I will not go into detail here but it suggests silver is cheaper.

This type of range trading environment provides a great deal of opportunity for trading silver options. Lack of direction could be frustrating to trade at times, options are handy tools if you master a few strategies. Silver is not trending right now. Again, as I write, the US dollar index is making a new low so that should benefit silver to hold this support line I drew on the chart below. Silver needs to trade above 16.50 to get the bulls excited. If the dollar recovers, low 15.00’s are likely.

Silver Weekly Continuation Chart

Silver Weekly Continuation 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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