Market Curiosity: Exploring Markets And Systems

January 10, 2011

Outright blasphemy: short term short of silver???

Filed under: Futures Trades — Tags: , — Jeff Fitzmyers @ 8:49 pm

Notice I tried to put “silver” last so it was less noticeable? I am crazy positive on silver’s prospects. This is just a short term trade. I might even chicken out and call it a paper trade šŸ™‚

Sell March silver on stop around 28.65.
Stop loss around 29.16. Possibly stop and reverse.

ps. LBMA is in backwardation again — out 2 months this time. UPDATE: Out again as of Jan 11th šŸ™‚ But just the fact LBMA keeps oscillating back and forth so frequently is telling.

– 4 Big down days (distribution) and one little inside day spinning top on not very heavy volume? Not a positive sign.
– Today is a narrow range 7 bar.
– So far this has been a small correction. Many, including me, have chalked that up to so much physical demand be many parties for various reasons. But those are fundamental reasons and price patterns can do their thing within the bigger picture. And if that fundamental demand was so strong, why is price here, and not up there???
– Price is right under the uptrend line.
– Weekly RSI has been > 70 for over 2 months.
– Price is below the 5 EMA: still in sell mode.
– Stocks went up today (mostly) and silver did not
+ SLW, a stock that seems to me to lead the price of silver did go up today on pretty good volume… but it could have done more.
– Both the monthly and weekly CCI’s are down trending.
+ Daily CCI is around -100. Price could bounce here for a day or 2.

Although this could be a fake breakout… yet this seems to me to be a perfect set up for a short trade:

UPDATE: Jan 11, Phew! Price went up not down. If the rise continues a bit more, and then there is a pull back, it will likely be time to get very long.

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