Silver continues to understandably capture the imaginations of many traders these days. After all, the commodity and it related assets have delivered all kinds of action and drama over the past several months. As far as high probability trades go, looking at the daily chart of SLV, we can see the massive volume on Monday after a very steep climb over a period of months. This usually indicates an intermediate-term top. Yesterday, we saw some downside confirmation to Monday’s “hanging man’ candlestick.
Today, however, the silver bulls are out in full force mocking the top-callers. Rather than get caught up in the chest-pounding antics, a better approach is to have a specific game plan. As of this moment, I think it is correct to be completely neutral on silver. If price can consolidate for perhaps a few more days up here, and then breach Monday’s highs, then the hanging man will to have been negated and the uptrend could easily persist. However, I must say that on weekly and monthly timeframes silver is so stretched here that I am not itching to go long.
Instead, the specific game plan for shorting silver, via ZSL (Ultrashort silver ETF), would be to wait for a breach of Tuesday’s lows of $43.55 on the SLV. If that happens, then it will continue to confirm Monday’s hanging man as an intermediate-term top. We know that silver continues to have plenty of hot money traders in it, and today’s bounce will keep them around long enough to justify taking a look at ZSL…but only if we get our trigger and stick with the game plan.
__________________
Hey Chess,
Hope you are well……completely agree with your neutral view of silver above. As always, I think your approach is well planned.
Quick question on ALKS….do you think this one is ready to go if it can break $14? I think it looks pretty good from a technical standpoint, with a wedge forming over the past few weeks.
Just wanted to get your thoughts — thanks!
yep, above $14 good to go I think
Got close today $43.76.
yep–tomorrow will be key, imo
you mean getting second place in the olympics isn’t going to be better than first anytime soon?
who knows-i’l just trade the game plan