RJO FuturesCast

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Metals

Silver Technical Bottom?

Posted 12/15/2017 11:23AM CT | Eli Tesfaye

March silver is trading 16.040, up about 10 cents on the day. The aftermath of Fed rate decision, silver looks to have found a bit of a technical bottom. What I see impressing this morning is that silver is moderately strong even in light of bullish dollar price action. In a broader term, silver could benefit from a friendly tax reform that would increase demand for its industrial use.

Silver is modestly trading higher with a technical improvement from a recent 1 dollar break in price. These days the only time you hear about silver is its reference to Bitcoin (Litecoin). As in Bitcoin is to gold, litecoin is to silver. Commodity markets have lost some lust as the result of Bitcoin mania. 

The Commitment of Traders with Options report (COT) released today will probably show increasing non-commercial and non-reportable traders are adding to their net long positions from the week ending December 8, 2017, No doubt that the bull camp needs a farther catalyst to drive price higher. Decent correction in equities and fresh geopolitical concerns in hot spots around the globe could push price higher. 

Bargain hunters can ease into the long side from these levels with a tight risk. As I have stated before though, those who want to be long silver will be better served if they come in on strength rather than weakness.  That said, a close above 16.50 should signal that near-term lows are possibly in. I expect to see strength in silver in coming days. 

Silver Mar ’18 240min Chart

Silver_Mar18_240min_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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