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When Silver Cracks: Start Scaling Bullish

By  |  Commodities  |  Dec 20, 2012 09:08PM GMT  |   2 Comments
 
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Silver
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Silver happens to be one of my favorite commodities to trade but it's not for the faint of heart. Early in my career a very successful commodity trader told me that silver takes the escalator up and the elevator down. Translation: When silver cracks it can be a big move in a hurry as seen in last week’s action. In the last six sessions, silver has been down every day, dropping roughly 11%. In dollar terms that represents almost $19,000 per future contracts. On ,oves like that, fortunes can be made and lost, so make sure you know what you're doing or deal with a professional if swimming in these waters.

Tactics
My objective has been reached as I’ve been saying a trade under $30 bearish trades should be taken off and with a 61.8% Fibonacci retracement completed, Thursday, that is good enough for me. If you notice, I point out that we filled the gap from 8/22 mentioned in previous posts. My stance now is aggressive traders should reverse and start scaling into bullish trade. At current levels I suggest buying 1/3 of the ultimate position you want to own. Lightly start scaling into futures or call options on the upside. I will be suggesting various strategies depending on clients account size and risk tolerance. Use the Fibonacci numbers on the upside on the chart above as your target. At a minimum into early 2013 I think we can trade back near $32/ounce. The chart above is for March options and I suggest May or even July contracts depending on the strategy.
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Silver
 
 
 
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Comments
sarvesh khemuka
sarvesh khemuka Dec 21, 2012 04:19AM GMT
One of the major confusions i have is.. if the fiscal cliff issue is resolved will it lead to a rally or a downfall in gold silver prices.. rally because some sites say it suggests growth in economy.. and downfall because the safe haven ideology gets defied... and some also suggest that actually silver and gold will behave inversely.. i.e if fiscal cliff resolved silver will rally but gold will fall.. and if not resolved gold will rally while silver will fall as its an industrial metal linked to economic growth..

sanjay aggarwal
sanjay aggarwal Dec 21, 2012 02:06AM GMT
what i think sir , it will take another 5 trading session to revive coz lets taste next 28.831 , this i may be wrong but i may happen
 
 
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