Bullish Divergence Sets Up a Buying Opportunity for Silver!

3 февр. 2021 г.

Silver (often traded through SLV/PSLV ETF's) has had a busy week! After getting pumped to 10-month highs on Monday, we saw sellers attack price relentlessly for 2 days. Today, however, was different. Back at old-resistance/(new support?) from 2020 at $24.50-$25 on SLV, we are seeing a basing pattern with hidden bullish divergence on the cumulative volume percentage indicator (lower lows on indicator, higher low on price). This suggests sellers have been more aggressive than buyers, yet price has not dropped further as a result, suggesting there are opportunistic buyers accumulating at these levels. This offers a unique trade opportunity to the long side. If SLV can hold its low of the week (or at least not close a weekly candle below it), it provides reasonable reward-to-risk for a 50-62% retracement towards the highs, and possibly a gap fill. Note how CCMI (or your momentum indicator of choice) is rotating back upwards, approaching the zero-line on the 78min chart (no using hourly charts for indicators on equities or ETF's! Every candle MUST have the same amount of info for indicator readings to be valid!). I expect we see some bullish momentum into the end of the week. Buying a breakout over Wednesday's high or even after a dip under the low that is supported by the daily 50 sma (not pictured, currently at 23.52) makes a LOT of sense.

9 февр. 2021 г.

Сделка активна

Forgot to update that this trade was triggered in on 2/5. Currently holding in profit. The dip on the 4th of February was extremely productive. The gap on the morning of the 5th was a text-book re-test gap on the 78 min but on the daily it was a gap-and-go. When timeframes don't align, you typically trust the higher ones, but I expected some intra-day weakness sometime early this week as a result of profit taking. We got that at the end of the day Monday AND Tuesday, with both gaps holding at close. A 3rd gap could trigger a sell at the end of the day for me, especially if we closed that day green, as further short-term progress would be considered exhaustive. Baring that, I'm looking to hold until 26.00+ target is reached.

17 февр. 2021 г.

Сделка закрыта: достигнута стоп-лосс цена

Closed this trade early just above B/E Tuesday when we saw 25.50 test and reject. The gap is unlikely to be closed anytime soon if we can't push through 25.78. With bond yields screaming higher, gold and silver are likely to rest. The trend is still intact, but the fundamental basis for this trade is being challenged as bonds sell off. funds can be better allocated for the time being. Will re-visit when bonds settle down.