Silver Forecast for the week of July 16, 2012, Technical Analysis

The silver markets had a very quiet week just as the gold markets did over the past five sessions. However, the silver markets may have more headwinds facing it than the gold markets. We can see that the chart is grinding lower, and it does appear fairly obvious that the $25 to 26th dollar level is massive support as well. However, there is still a very plausible descending triangle in this market and unlike the gold market – we have not drifted too far to the right to negate it.

On a daily close below $25, we are willing to short this market aggressively. We think that if that level gets broken we could see the $15 level before it’s all said and done. As for buying the silver markets, we don’t see a long-term trade until we break above the $30 level which of course is something that looks a bit unlikely at this point in time.

With all this being said, we find that this market is going to be difficult for the longer-term trader until we break out of this tight trading range. With the low volume is in the summertime, it may actually be this fall before we get a decent set up in the silver markets. However, this doesn’t mean that you should be paying attention to them. In fact, a lot of these “obvious moves” that tend to happen when traders come back from summer break are actually easy to see ahead of time if you are diligent in following the markets. After all, not all traders come back at the same time.

Looking at the silver markets, we can see that this potential triangle is huge. We would be looking at a roughly $22 drop at that point in time. Sounds crazy, but this would essentially be a return trip to the levels that silver was trading at four years and years before the bullish run over the last several trading years.

While we can’t necessarily suggest that the $4 level is going to be had, we do see that a break down below the $25 level opens the door to $20, and more than likely $15 as the $20 level looks to be only minor support. If we do manage to somehow break above the $30 level, we feel that this market will attempt to reach the $36 level at that point.

Silver Forecast for the week of July 16, 2012, Technical Analysis
Silver Forecast for the week of July 16, 2012, Technical Analysis

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