Time For My Silver Bullet

Given yesterday’s snooze-fest I was tempted to simply skip today’s session. But then I stumbled across silver which quickly changed my mind. There are good entries, exciting entries, and then there are the ones a card carrying evil speculator simply has to partake in. So without further ado…

That is one beautiful formation with the hourly circling around the 100-hour SMA, which is just about to swing higher. Meanwile the daily has us triple testing the 25-day SMA with a spike low already in place.

The long term perspective is equally tantalizing. On the weekly panel we are now back above the upper 100-week Bollinger and the monthly is attempting to hop over the upper 25-month BB. How could I ever resist?

Now good looking campaigns are a bit like dates – they are seductive and the odds may be slightly in our favor, but they are no guarantor of success. So don’t get nuts and keep your exposure limited. The volatility profile suggests that it may test our patience a little here and whipsaw around for a few more days. Especially since Yellen is scheduled to deliver the Fed monetary policy statement tomorrow around 2:00pm Eastern. So definitely be prepared for that mess, which is another reason to place our ISL a respectable distance away.

Also, if you have a small account then you may want to play SLV instead as the SI futures contract is pretty big. If in doubt use our handy futures risk calculator – at maximum you should not be exceeding 1% on one single campaign. Remember that in general the bigger your stop the less contracts you are able to trade. On silver every single tick runs you $25 and let’s say you use a 55 tick stop then you’ll need at least $140k in assets to afford one single contract. Because if stopped out you will be down at least $1,375 (excluding commission and assuming a decent b/a spread). The SLV is a lot smaller and more appropriate for smaller accounts.