Silver´s situation changed, you change
When the situation changes, you have to be willing to change with the situation. It is this required flexibility that distinguishes the professional from the amateur, not only in trading. While the bigger picture is the same, we have seen many unusual pattern formations over the last two months. Intraday trading behavior similarly is atypical for Silver and points towards manipulation. Luckily, changes like this also provide opportunities. Silver´s situation changed, you change.
This week’s price action changed the probability for the short term towards the highest likelihood of continued sideways movement within the established range of the last eight months. Consequently, opportunities have been opening up in the related mining sector. Meaning now is the time to prep this additional field of leverage and sift through one’s choices on how to strike once Silver has found its bottom.
Weekly Chart of Silver Spot Price compared to Mining Companies:
The main work in trading is to be prepared. “Make a plan, and trade that plan.” Comparing fundamentals and charts, we found the above candidates to be prime for additional holdings to your spot price trading and physical holdings.
The weekly comparison chart shows the strong relationship of mining company valuation towards the actual Silver spot trading price. It also illustrates a beta component meaning the miners move from a percentage perspective proportionally more than the spot price. Depending on your risk appetite, you can pick what suits your aggressiveness of investment style best. This requires adjustment of risk through position size. Miners offer a stock market exposure with leverage and an instrument where you wouldn’t mind owning a part of the company you are holding stocks in. This in an environment where thinking from a wealth preservation perspective is vital.
Silver in US-Dollar, Daily Chart, Silvers situation changed, you change:
The daily chart above shows why we find the short to mid-term picture to be changed. A significant tight trading range (yellow box) broke to the downside. The bears were able to get the upper hand and not only over this range but price also broke through a significant supply zone based on maximum volume transactions at the US$26.11 price zone. This results in a successful second leg of a downtrend within the broad sideways range fulfilling the bear flag marked in red lines.
Weekly Chart, Silver in US-Dollar, Refining the plan:
The weekly chart of Silver shows in white the last eight months’ sideways range. Within that range, we had three dominant zones. Trading at the bottom of range three (green box) suggests the highest likelihood of turning point to be at trading prices right at this moment or below. (all the way down to US$22.50). Watching Gold, the sector leader for relative strength or weakness towards Silver and the individual mining stocks to pick out the highest likely turning spot and the low-risk entry point is the goal over the upcoming weeks. In short, while prices trade within the yellow circle price range, US$22.50 to US$25.05 mining chart evaluation is advised.
Monthly Chart, Silver in US-Dollar, Lift Off delay:
While none of these events changed the larger time frame outlook, the time component when the monthly and weekly trades will follow through to the upside has been delayed—an excellent time to plan one’s next trading instruments and entry point levels.
Silvers situation changed, you change:
Through training, one can adapt to a more free mindset, allowing one to see clearly if plans pan out differently to formulate a different approach. This ability to rapidly change one’s opinion helps to perceive the market for what it is and not be emotionally involved if the future becomes different from anticipated. Welcoming the change, knowing it offers new opportunities, is the mental state a good speculator operates from.
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