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Precious Metals Lottery Tickets
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Precious Metals Lottery Tickets

by The MoleJune 26, 2017

Apparently some alleged fat finger just caused a massive drop in gold moments ago dragging silver with it. If you’re a sub then you know that we were actually waiting for a slight drop in both last Friday. And boy are we glad that we didn’t get filled that day! Technically speaking this puts us on the fringes of the short term bullish scenario, however it does not invalidate it plus it’s possible we are going to see a bit of mean reversion.

Let me point thought that in many cases there is follow up downside and thus any long positions right here should be considered coin flip lottery tickets. That said let’s get to the setups:

2017-06-26_gold

Gold has dipped below its prior lows and may just decide to continue in the same direction. However a small 0.25% lottery ticket right here with a stop <1235 is justified. The win/loss rate is slightly negative (e.g. ~45% depending on the cycle) but the winners far outweigh the losers, usually banking 3R plus.

2017-06-26_silver 

Silver is about to roll over but I’m showing you the July contract first so that you have the overall picture. The daily panel is looking very compelling to me so I will devote another 0.25% to a long position here with a stop a bit further away than on gold unfortunately. Doesn’t really matter for most retail traders anyway as it’s a big contract and if you’re only grabbing 0.25% most likely you can afford one or two contracts anyway.

2017-06-26_silver_sept

Now here are the actual entry levels on the September contract. Entry is near 16.5 with a stop < 16.28.

Caveat

Not to sound like a broken record but let me once again emphasize that both setups are low probability high payoff lottery tickets in a highly volatile post flash crash situation. Which means extra small position sizing and wide stops.

Happy hunting and catch you guys later.


About The Author
The Mole
Mole created Evil Speculator amidst the chaos of the financial crisis in early August of 2008. His vision for Evil Speculator is a refuge of reason, hands-on trading knowledge, and inspiration for traders of all ages and stripes. You can follow him and his nefarious schemes at various social media waterholes below.
  • Scott Phillips
  • http://evilspeculator.com Sir Mole III

    It’s really a coin toss and I only do it if the longer term charts are still valid. IMO they do still point upwards, thus slightly mitigating the risk.

  • http://evilspeculator.com Sir Mole III

    Oh, you were short? Lucky bastard….

  • Scott Phillips

    HA! If it wasn’t for bad luck I’d have no luck at all.

    Just a regular old setup, both the Scalpius and Last Kiss.

  • http://evilspeculator.com Sir Mole III

    I just looked and didn’t see Scalpius triggering on my or your end.

  • http://evilspeculator.com Sir Mole III

    Oh are you guys trading Scalpius on the daily?

  • http://evilspeculator.com Sir Mole III

    I just corrected the silver contract – had posted August in the rush. I hate roll overs…

  • ridingwaves
  • BobbyLow

    Had a news feed come through my TOS (can’t provide link) that reported Gold sunk on anticipation of a good manufacturing report this AM. However, this report came in worse than expected and Gold reversed course somewhat. This is probably all bull crap but it does put some words to go along with this morning’s shake out.

    Of course this was the first weekend that I carried over a long miner position. I could expect no less. :)

    I spent some time over the the past few days working on the Long Term Bond again and was fortunate to also be carrying a long position via 3X TMF which is more than picking up the slack in my account.

    Currently getting some long tails on /GC 195 Minute so I guess we’ll see if this sell off has any legs.

  • ridingwaves

    real tell will be how GC moves in Asia tonite….When London fat fingers appear, NY fat fingers tend to keep pressing…

  • BobbyLow

    In the mean time, I’m currently seeing Short Gold and Long Miners by my lens. I don’t like it when these two are in conflict. However, they usually end up coming together in one way or the other so we’ll see what happens.

  • ridingwaves

    bio sector taking up all my angles….so discount anything I say about GC right now…
    shorts in big trouble at AVEO…could head to $5….

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb
  • ridingwaves

    GLD is a tricky paper gold product to chart….seems to be a trendline bottom right here

  • ridingwaves

    a little contango in vix instruments…L UXVY

  • Mark Shinnick

    Ahh…but which len’s trend?? Short equities.

  • Mark Shinnick

    …backing off on short equities…see what happens.

  • ridingwaves

    anyone ever wonder if a symbol like VRX where Ackman whom can be vocal and adamant about position, then takes a huge billion dollar loss selling out, is driven back up by big money to almost stick the loss in deeper….
    PF chart has 25.5 on daily, weekly higher….volume hole between 17.50-19.50
    double top breakout 6-22

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb
  • Mark Shinnick

    This zone for miners has been congested for months; I’m short…but just want to point out the setup potential.

  • Mark Shinnick

    I’d actually like to think so – let em really have it. Its just so dumb in my view to be still shorting that so late in the game so they really deserve what’s coming to them.

  • http://evilspeculator.com Sir Mole III

    Zero snapshot:

    https://uploads.disquscdn.com/images/07b1386290561c862dc33203b9b130d59d6261b96384bb01891cf1fb22948e96.png

    Positive signal thus far but I don’t like the fact that we’re trading < VWAP.

  • Mark Shinnick

    Whew… this is damm great art….what its all about while what everybody knows is not worth knowing.

  • ridingwaves

    yep…they wound it down pretty good..
    lots of biotech volatility pushing symbols with profit taking…
    put a buy order for VRX at 15.80..might not ever hit but nice place to get in for that pnf target run

  • BobbyLow

    Hey Mark, I’m curious if you are going for “longer” term swings on the miners now instead of trading your one minute charts?

    There’s been a lot of noise lately so I’ve at least temporarily slowed mine down a little going to 195 Minute that gives me only two bars a day instead of the 6.5 on the hourly. We’re on opposite sides of this trade and I think it could go either way at this point. NUGT filled this morning’s gap down but where she goes over the next day or two is another story yet to be told.

  • Mark Shinnick

    Still very close-coupled, for example all out for the moment looking to reenter short. Yes…very touchy right now.

  • BobbyLow

    Cool, and this brings up some of the differences of what a person’s lens might be seeing at any given time because it’s all about the time frame being used.

  • Mark Shinnick

    Very much so. For example, I can survive in very short time frames…. but am historically unsuited to hold positions through an entire trend.

  • ridingwaves

    opex tomorrow for metals…will play with it also…$USD weakness still in play…durable goods order helped $ bears..not in price though

  • Scott Phillips

    Yes, the daily is awesome. Way, way better than the other timeframes

  • http://evilspeculator.com Sir Mole III