Silver markets broke down during the week again, as we continue to see a lot of bearish pressure. At this point, it is oversold, and we have seen support at the $14 level. By turning around the way we have, it looks likely to try to bounce from here, but quite frankly we need a bit of a break from US dollar strength. As long as the US dollar continues to strengthen, that will continue to weigh upon silver. However, I think there is a short-term bounce ready to happen. I think that the $15 level above will continue to offer resistance. If we can break above the $15 level, then the market could go much higher, perhaps reaching towards the $16 level after that. That’s an area that was previous support, and it should now be significant resistance. I would be surprised to see silver break above there anytime soon.
If we did break down below the $14 level, that would be a very ominous signal for the future of silver, perhaps sending it down to the $12 level rather quickly. At that point, I think there’s even more support based upon church going back several years. I expect to see a bounce over the next several weeks, but if we don’t get one it will be because of the greenback itself. Silver is getting hammered week in and week out, and a simple “dead cat bounce” is probably do. That doesn’t mean I would buy it in a leveraged form, just that you make it an opportunity to sell CFDs at higher levels.