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Time For My Silver Bullet
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Time For My Silver Bullet

by The MoleJuly 26, 2016

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…

2016-07-26_silver

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.

2016-07-26_silver_LT

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?

2016-07-26_volatility_silver

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.

risk_calc

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.


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 the usual social media waterholes.
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  • ridingwaves

    go gray mare go….

  • ridingwaves

    did crude bounce off a support line this AM that my view has filtered out?

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

    Naz leading. Bullie.

  • Billabong

    Hit multi-month low of $42.36 and went straight back up.

  • Billabong

    That is quite a move considering how flat everything else is.

  • ridingwaves

    jumped in SGY at opening and I’m out already, last night they put out new production report- shifted higher…..I love this symbol…

    my other hope AVXL is getting MM roped and corralled…tomorrow they release data that should provide fuel for big move if data is good….

  • Mark Shinnick

    TINA

  • Tomcat

    Do we have any gold bears in here? If yes, can you provide the rationale, because from everything I have read and digested I just don’t don’t understand it.

  • ridingwaves

    the gold-silver cartel seems to be losing strength, being a bear here is risky but risk is the game….good luck to them…..

  • ridingwaves

    picked up FOLD for possible liftoff….S at 6

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

    There was a memorable discussion years ago in this forum around understanding.

    Some were in the camp, who MUST understand what is going on with their favorite trading horse before riding it. Other’s were in the camp (although) smaller, who did not want (or care) to understand, other than to simply ride.

    I’ll pull an Ivan, and keep the text short. Which camp do you want to be in?

  • ridingwaves

    crude is jumpy today…..must be getting near buying zone, I had it possibly going lower at 41 and change…

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

    it hasn’t gone anywhere in ~10 months.
    but if it breaks the falling highs T/L, boo-yah.

    http://stockcharts.com/h-sc/ui?s=FOLD&p=W&yr=3&mn=0&dy=0&id=p33435604523

  • ridingwaves

    gets past the barney line and things really get interesting…should run fast if so with shorts under a 4 day cover scenario

    https://s31.postimg.org/n1tljf3nv/Fold_knocking_at_the_door.jpg

  • Tomcat

    Rather than let my opinions (regarding which camp is right/wrong) dictate my trading, I am trying to focus on the data and facts. Whether its inflation, fear, hedging, FEDs/CBs actions/”mistakes” coming home to roost, are all “telling” me that gold will be higher in mid-long term. Am I missing something though (is there a compelling rationale to be more pragmatic)?

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

    too good to be true,
    ..glancing in an hour later…..

    http://board.crossfit.com/image.php?u=45110

  • https://evilspeculator.com Sir Mole III

    Everyone is asking WTF was that??

  • https://evilspeculator.com Sir Mole III

    No bears – just traders without allegiance to a particular camp.

  • Mark Shinnick

    The markets are the only discounting mechanism we realistically have, so unless someone has good edge in some manner, its only usually the markets we have by which to dictate a trade. So price would be the limit of our understanding.

  • https://evilspeculator.com Sir Mole III

    The problem with focusing on data these days is that you are ALWAYS looking at a very small sample size. My approach is that all that data has already been incorporated into price movement. Which also answers your logical next question – price movements cannot be predicted.

  • https://evilspeculator.com Sir Mole III

    Hear hear!

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

    you may be missing something.
    traders tend to goal-seek to support, beliefs.
    Many observations are also ‘spun’ to fit the belief frame.
    It’s the human lizard brain. Can you trust it?

    Have you written down every time those “tellings” were right, and when they were wrong? Even then, you only have the win-loss ratio. If your wins pay bigger than your losses, and it works for you?….you are Success in the making.

  • Tomcat

    I was not, but I will ask now…WTF was that???

  • https://evilspeculator.com Sir Mole III

    Exactly! It killed one of my open positions – crappy timing… :-{

  • Tomcat

    A commodity that I frequently monitor but is rarely discussed here is PA (palladium). I believe is entering shorting territory ($700-to say $720). I welcome your thoughts.
    http://stockcharts.com/h-sc/ui?s=$PALL

  • https://evilspeculator.com Sir Mole III

    Hollande: “All people feel affected so we must have cohesion … no one can divide us”.

    Uhuuuu – but they keep killing you. May want to do something about that.

  • Billabong

    No rush to take a position … check out PS for an example of a sell signal many days ago. Someone keeps buying it back up on every down move.

  • Tomcat

    Chart?

  • https://evilspeculator.com Sir Mole III

    I personally have a hard time trading PA as it moves horribly plus getting filled is often quite rough.

  • Billabong

    The French are stepping up air ground/operations in Syria. Lone wolves are hard to stop. If 5% of the US population is mentally unstable, there are potentially 20M opportunities for a mass casualty situation … Europe has the same problem plus PTSD refugees and hordes of young people going into their 20s who haven’t lived in a stable society and understand the norms of civilized society.

  • ridingwaves

    I just look at negative yields on 10 yr bonds across earth and can’t help but covet the precious…..

    German monetary officials in the weimar republic kept saying inflation is non existent all the way up to the implosion…..

    Central bankers are clueless……that is a great reason in itself to buy gold..

    though I like Mole’s choice- The gray mare is now being bought up by the middle class Chinese folks whom can’t afford Gold….

  • ridingwaves

    many of these refugees are sleeper cells…..their is no denying it…

    Accepting Syrians when all the ME countries around it will not is tantamount to swimming in shark infested waters……

    it will get much worse……

  • Mark Shinnick

    Yeah, 1 out of 20 of us really is dangerous/disordered in some way or another. These narcissists and psychotics …each seeking their own models and justifications to bring harm to everyone else.

  • ridingwaves

    their religion and unwillingness to fight for their country is all you need to know….Europeans should have built an army with all the 17-50 yr old males whom fled to fight for their country….no entry or citizenship unless u join for 4 years…..

  • Tomcat

    OKKKAY trump

    Let’s just built a wall around Syria and have them pay for it

  • kudra

    currently In the QID at 26.79. was in DUST today at 6.66; out at 6.76. scalping games.

  • ridingwaves

    whatever Tomcat, keep on burying your head in the sand…..
    maybe it’s time to forget about those John Mellencamp songs and chewing on a straw in your ford pickup thinking the world is a peaceful place….. Syria is not our problem…..Trump is only feeding off what everyone is afraid to admit……sheeple are everywhere in this country, even right here on ES

  • Tomcat

    🙂
    fear mongering from a demagogue. yeah that’s the proper way to live.
    After you duct tape your house don’t forget to cover your iphone and laptop camera, because you know “big brother” is watching

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

    Howdy rats… Long time no see. I survived another fireworks season with all my appendages intact. I had to skip a month of Mole’s prognostications, and I’m just getting back to ‘normal’.

    Good article from Brett Steenbarger that I just read. Worth following the links:
    http://traderfeed.blogspot.com/2016/07/rationality-source-of-all-trading.html

    Links will take you to some interesting quant posts from Marcos Lopez de Prado. Lots of heavy duty quant stuff, with machine learning thrown in to boot. Mole will want to check it out if he hasn’t already. Here’s his site:

    http://quantresearch.info

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

    for movement …yen taking off again. unfortuantely, ditched one of my two positions yesterday. grrr. gotta play by ur rules, though.

  • Billabong

    Glad to see you back. And no explosion stories related to you. Thanks for the link. Steenbarger is always a good choice…

  • https://evilspeculator.com Sir Mole III

    LOL – totally.

  • https://evilspeculator.com Sir Mole III

    You forgot the aluminum hats. Must have for the self respecting conspiracy theorist. Look guys – I don’t know what’s really going on – none of us does. But one thing I do know: Shit is seriously out of control and it’s probably not going to end up rosy. Have some cash stashed in a safe place and some gold chips while you’re at it. You don’t need much – just enough to be able to sustain yourself for a few weeks when shit invariably hits the fan one day.

  • https://evilspeculator.com Sir Mole III

    Tough in this tape, ain’t it?

  • captainboom

    Rocco The Pyro Dog would disagree. Unfortunately, he died early this year due to old age. His owner is a good friend.

  • https://evilspeculator.com Sir Mole III

    Welcome back! Your presence has been missed. I already thought you blew yourself up 😉

  • https://evilspeculator.com Sir Mole III

    After four years living Valencia I’d be first in line there.

  • captainboom

    Don’t forget plenty of water and ammo 🙂

  • https://evilspeculator.com Sir Mole III

    He died happily in his owner’s arms but was unable to hear his consoling words as he was deaf as a post 😉

    Sorry about the dog. I remember how I felt when Squeaky dies, then Stripey. Just cats but it still breaks my heart to this day (four years later).

  • https://evilspeculator.com Sir Mole III

    Did YOU blow up the Spoos earlier this morning?

  • https://evilspeculator.com Sir Mole III

    I live in Europe now – water is full of calcium and ammo is hard to get. But I hear you – I still have a large box (ahem) stashed in storage for the day when I return.

  • mugabe

    I’m not complaining in general … my simple lens (medium-term momentum) has more or less been in sync with the market last couple of months.

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

    I’m seeing limited near term upside, taking 60% off the table (QQQ’s).
    that swing today made my tail twitch!

    http://stockcharts.com/h-sc/ui?s=QQQ&p=D&yr=1&mn=6&dy=0&id=p52729235111

  • ridingwaves

    28th is a cycle high….

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

    Congrats on a well executed trade.

  • https://evilspeculator.com Sir Mole III

    Simple lens which held up in the recent months = es cojonudo 😉

  • Mark Shinnick

    Yes, my pet favorite…applies perfectly to trading:

    “War is very simple, direct, and ruthless. It takes a simple, direct, and ruthless man to wage war.”

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

    second time this week I’ve seen a dog with muffs on.
    WTF? 😉

    http://d1dd4ethwnlwo2.cloudfront.net/wp-content/uploads/2016/05/bentley-helicopter4-1000×523.jpg

  • ridingwaves

    Why gold! Having a grandfather with a working gold mine taught me a lot about how hard to find that stuff is and how finding a little, means working a lot……..
    https://s31.postimg.org/kndj0gpaj/gold_production.jpg

  • captainboom

    I wish I could take the blame. I haven’t even looked at the market for a month.

  • OJuice

    Mole,

    Do the increasing lows on the zero lite indicate a higher probability that this pattern resolves upwards?

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

    thanks.
    plan the trade, trade the plan.

  • mugabe

    problem is, it sometimes doesn’t hold up when everyone says the tape’s ‘easy’ … horses for courses

  • https://evilspeculator.com Sir Mole III

    I can already hear you bitch and moan tomorrow afternoon 😉

  • https://evilspeculator.com Sir Mole III
  • https://evilspeculator.com Sir Mole III

    Under normal circumstances that divergence would have a pretty decent probability to resolve higher. HOWEVER tomorrow we’re getting Yellen at 2:00pm so unfortunately all bets are off beforehand :0{

    .

  • https://evilspeculator.com Sir Mole III

    Grand daddy with a working gold mine? Just to remind you that I am still available for late adoption.

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

    With the Zero at my side?!
    Neverrr
    😉

  • https://evilspeculator.com Sir Mole III

    Remember guys – FOMC day today – announcement at 2:00pm Eastern.

  • Skidmarkalot

    Thanks Mole!!!

  • Tomcat

    How could I forget… I have tattooed in my forehead.

  • Ronebadger

    Insider transactions…just another piece of the puzzle
    http://www.barrons.com/public/page/9_0210-instrans.html

  • Tomcat

    Sometimes the best trade is the one that you don’t make. I was gonna go short yesterday fully expecting AAPL to report a shitty quarter but forgetting they change the rules every time. Estimates were lowered 5 times, until finally apple was able to “blow” them away. Forget about the 15% decline in yoy.

  • Persons Name

    Fingers crossed for silver during Yellen curve ball day!

  • https://evilspeculator.com Sir Mole III

    GUTEN MORGEN!

  • Tomcat

    The market is going abe-chit and an apple a day is keeping the doctor away

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

    topping tail on the first 15min SPX bar
    http://stockcharts.com/public/1092905/tenpp/3

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

    yes, a taxi cab driver eventually CAN become a F1 racer.
    😉

    try to stay away from the ‘they’ thinking, it’s victimization.

  • ridingwaves

    FOLDing into nice profit scenario now

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

    RUT *could* move up to 1234 on the daily.
    based on last year’s Sept lows.

    http://stockcharts.com/h-sc/ui?s=%24RUT&p=D&yr=2&mn=0&dy=0&id=p12837997816

    EDIT: by then the RSI would be at a nice 70 level.

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

    silver must have caught a glimpse of the fed decision early….

  • pepe

    Great read, A Tale of two Cities”: “It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way – in short, the period was so far like the present period, that some of its noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of comparison only.”

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

    no, Mole just purchased another traunch overnight.
    😉

  • Tomcat

    I think we all got a glimpse of the fed decision when we heard that “Durable goods orders fall sharply in June”

  • kudra

    GDX gap and fade. what happened?

  • Mark Shinnick

    Bot tvix 1.29

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

    GDX is *usually* tied to silver.

    It’s a trap!
    https://finviz.com/futures_charts.ashx?t=SI&p=m5

  • ridingwaves

    BAMM, lift off in FOLD, moved stop to $6.70

  • Mark Shinnick

    Can you estimate an objective?

  • ridingwaves

    7.50 area, then up to 10′
    shorts will fight it out too….

    remember to keep an eye on AVXL volume today, poster presentation at 1PM EST…if volume starts to soar, get in and feed off momo and make sure to setup a trailing stop that works for you….

  • https://evilspeculator.com Sir Mole III

    Isn’t it a bit early for all the drama?

  • https://evilspeculator.com Sir Mole III
  • kudra

    Thanx. Dumped a bunch of DUST at 6.39 (approx. GDX 28.72) ave. cost 6.33. You guys talking up silver, gold and miners had me looking for the exit. salvage trade.

  • ridingwaves

    a surprise rate increase would be a something sigma event for sure….

  • ridingwaves

    stops taken out in AVXL

  • kudra

    jesus. that fawker cratered.

  • https://evilspeculator.com Sir Mole III

    So far the response has been rather muted…

  • https://evilspeculator.com Sir Mole III

    Yellen’s dashboard:

  • Mark Shinnick

    Proof these buffoons are lying big – what the hell are these unelected holes in charge of so much power?

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

    look at the silver.
    on, off, on, off

  • Persons Name

    PMs hanging in there. No smack down yet.

  • ridingwaves

    yep, naked shorts made a concerted effort to drive it down….the data looks pretty good, so something behind the curtains is taking place
    1/5 of float with 6.0 short ratio….I think the strong shorts are out….

    Might re-enter here if volume keeps up

  • Yoda

    in spite of all time high, fed chicken’d out. time to force the fed’s hand by buying PMs by the boatload.

  • OJuice

    Imagine the shame you would feel everytime you had to report on your decisions to a market that is pretty sure you are completely full of it… Unless of course you were so crazy that you actually believe it.

  • ridingwaves

    boatload buying seems to be taking place right now…

  • Mark Shinnick

    Yeah I bailed on Monday, but that stock’s story is pretty damm interesting so I may join you later.

  • steve J

    Question on VIX ETFs? I bought UVXY and sold SVXY first time last week when VIX was low 12s. Today VIX nearly touched 14 but ETFs haven’t responded and have gone the other way. I also lost substantial percentage when they were rolled over at well above market price.
    I knew there was some time decay but can anyone explain why a 15% rise in vix has caused long Vix ETF to decline and a short ETF to increase? Should I dump them?
    Thanks

  • Yoda

    just got myself plenty of gdxj

  • Mark Shinnick

    Narcissists and psychotics feel no shame.

  • Yoda

    dump that shit.

  • Mark Shinnick

    Yeah, stay the hell away from it if that’s your method. The real market to base from is only the tradable instruments.

  • BKXtoZERO

    They suck, your timing has to be dead on.

  • Yoda

    seriously, the fed took away any ounce of credibility they may have had. Market is just laughing at these idiots and called their bluff.

  • steve J

    Thought so, I seem to remember a post on it but can’t find it. My system says Vix above 14 is unlikely for next few weeks, and I know hope isn’t a strategy so will close them at loss rather than watch them sink into further decline. shame as my timing was good on the underlying

  • Persons Name

    They are all based on rolling over futures contracts to make a continuous product. Vix futures do not always change in lockstep with Vix and the diffrence in first to second month is super important. There are a ton of good articles out there on how the ETFs are calculated. You should read them first prior to buying these ETFs, if you are going to buy them (which I certainly don’t recommend), IMHO. Good luck.

    Edit. Check out http://vixcentral.com/. That first to second month cliff of a difference is killing you.

  • steve J

    perfect thanks. Was watching the position leak cash and couldn’t work out why. The setup I was trading was a rare quant based event, and I was trying to capitalise on a vix spike without material decline in spx.

  • Lugman

    The data looks pretty terrible IMO. When a biotech falls 35% the day they release data of their study, you know its not just “shorts making a concerted effort”.

    Essentially it appears the study they are conducting completely lacks a control group and the long term results seem to be strongly in question… The study they are conducting is not scientific, sure if the results would be great it could give some clue/direction as to where the medicine is at, but now it seems the results are poor along with study design…

  • Mark Shinnick

    I.E. : Flat broad market and ES, but – 7% on the 2x vix instruments.

  • Billabong

    The worst ETFs are the percentage of an index daily move … guaranteed to lose money long or short. In reality, you can short both ways and on a long enough timeline you will make money as both the long and short ETFs go to zero.

  • Billabong

    PMs / miners showing strength on status quo Fed. ABX earnings after close.

  • ridingwaves

    with the results today, the drug would be the new SOC compared to all other ALS drugs,…

    I’m stopped out, will get back in as the data is good. CPXX went from 9 to 1.5 and then was bought for 30

    shorts own bio land…so this is not unexpected

  • Mark Shinnick

    Back into txiv 1.24

  • Yoda

    An absolute beauty!
    DX is cratering and traders are showing the middle finger to the Fed. The PM rocket has left its launch pad.

  • Persons Name

    PM’s could run here for a little bit (by little bit I mean a lot) after a breakout like that on a Fed day. Going to move up the stop to BE and let it run.

  • Billabong

    Sounds like you’re enjoying the ride….

  • Yoda

    got back in pm with a large position after the fed call. I am indeed enjoying the ride. 🙂

  • Billabong

    That’s good to hear. Always enjoy positive stories. For me, it’s now a question of campaign management…

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

    gotta luv gold. gotta. RSI around 50.

    GLD red line support.

    http://stockcharts.com/h-sc/ui?s=GLD&p=D&yr=1&mn=6&dy=0&id=p30795507921

  • Yoda

    lost quite a bit of coins trying to short the tape in July. after today’s announcement, i’ve decided to re-allocate a major part of my portfolio into long PMs. to my lense, the fed had to hike today in order to keep a semblance of credibility, failing that it would lose control over the lid it kept on PM prices. jawboning does not work anymore. seems a lot of market players see the same. yellen is cornered and can now suck my .l.

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

    as for GDX. “blue line” for the win.

    http://stockcharts.com/h-sc/ui?s=GDX&p=D&yr=0&mn=6&dy=0&id=p93014173617

    hat tip to Mole for Silver and his excellent nose.

  • Yoda

    yup hat tip to the mole’s nose, the best in the market

  • https://evilspeculator.com Sir Mole III

    I guess I earned my keep this week 😉

  • Yoda

    Good time to empty the atm in VLC

  • Billabong

    That is the impression I had today on the PM move. Credibility is everything and market price action tells the story. On a side note, this was the last trading day for July GC / SI and first notice for AUG is on Friday.

  • https://evilspeculator.com Sir Mole III
  • https://evilspeculator.com Sir Mole III

    Yes, holding ETFs long term is a very bad idea – there are a ton of articles that explain the syncing issues which are detrimental to traders.

  • evilasevildoes

    still long si?

  • https://evilspeculator.com Sir Mole III

    Yes, but I may get stopped out soon.

  • https://evilspeculator.com Sir Mole III

    See my right sidebar – my campaigns are all in there.

  • https://evilspeculator.com Sir Mole III