Silver Forecast August 14, 2015, Technical Analysis

The silver markets initially fell during the course of the session on Thursday, but found enough support below to turn things back around and form a hammer. The hammer sitting just below the $15.50 level is of course a very positive sign. After all, it suggests that we are starting to try to build up momentum to break out. However, we look at this market and recognize that the $15.50 level is massively resistive, as it was previously supportive. With this, we feel that the market will try to break out above there but there so much in the way of negativity and resistance above that it’s going to be almost impossible to imagine that the markets going to have an easy way to go.

Even if we broke above here, we believe that the $16.00 level above will also be massively resistive and it’s not exactly can be easy to get there. Because of this, even though it looks like the buyers are starting to take control a little bit, the truth of the matter is that it’s very difficult to imagine buying this particular commodity, especially considering that the US dollar looks like it is somewhat supported in this general vicinity.

However, we break down below the bottom of the hammer that of course turns that candle into a “hanging man”, which of course is one of the most bearish candlestick formations that you can get. At that point in time we feel that the market would head down to the $15.00 level, and perhaps as low as the $14.50 level. We feel that this market will be choppy regardless what happens, so you will probably have to use short-term charts for the entry regardless of which direction you want to go. We would also be very quick to take profits as they appear, because we recognize that this market is somewhat ill liquid at times anyways, and of course it is the middle of summer. We will have to pay attention to the US Dollar Index, and quite frankly we feel that it has to go lower for this market to go higher for any real length of time.