Still holding an uptrending channel. Holding this level would be super positive, setting up for a wave 5 move to the top of the channel. By rule, Wave 4 cannot breach Wave 1 so while lower prices are still possible, impulse waves generally conform to the channel. As my long term outlook is for eventually testing the highs, I was buying Jan 2020 and Jan 2021 LEAP calls.
Earlier write- discussed the double bottom pattern. To prove the double bottom formation, price would need to break through the last major high just under 20. My expectation was that it would pick up steam and run to fill on gap on SLV above 25.50. Not certain if gaps in SLV get filled like gaps in stocks since XAGUSD trades pretty much continuous. I was watching today to see how SLV would react to filling the gap. I was buying as that gap filled. It then rallied from their but backed down at the close of the day. So I'm thinking that gaps are valid and there may be a run to 25+
As 20 gets touched/breached, would expect some selling but also, as another poster wrote, buying above 20, a breakout level, was the strategy.
As the five wave pattern completes, I'm expecting the ensuing correction to last around 3 months, possibly into next year, so I'm planning to liquidate the 2020 calls, holding on to the 2021s. Expect lots of great trading opportunities during that correction phase to build a large position in anticipation for a run to test the highs.
If today's (9/27) low breached the lower yellow line, below ~16.03, would that indicate that there is a likelihood of lower prices?
What are your thoughts on how SLV performed today after starting with such a depressing start?
BobbyBanksX
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I appreciate and am following your commentary. Thank you for sharing.
Glewis54
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@TuParkShakur, you asked what my target is for the 2021s, right now my first objective is for it to break above 20 to perhaps 25. At that point I'm going to sell a portion of the 14s, 15s and 16s I've been accumulating and on looking for a test of the breakout level, plan to buy lots of 20s, 25s and 30s. Target $70. I will need to probably roll these over as I don't know if this will happen until 2023/2024. Thanks for commenting on my observations. Think silver is the buy of the century right now.
BobbyBanksX
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@Glewis54, it's such a bittersweet relationship for me with silver; I know it's worth much more than spot prices, but it elevating to its real worth will hold me back from getting the amounts that I can now acquire.
I only hold Jan & Apr 2020 calls, and they're all in the money. I haven't thought of buying 20s-30s but I will take a look to see how I can work out some sort of holdings for such LEAPs. I'm ultimately doing all this to acquire physical so I'd have to consider how to work such faraway expirations with my trading strategy.
I look forward to your commentary. I'm an options and TA beginner so reading your posts about my favorite commodity is fascinating. Have a pleasant weekend, Mr. Lewis.
Glewis54
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@TuParkShakur, I have been accumulating the physicals for some years now but at the size of the position I wish to build, I don't have the vault facilities nor do I desire to keep it in a bank deposit box.
When buying the physicals, you pay a premium for both fabrication and dealer markup. Considering this, when buying an at the money LEAP, paying $2, I see it as not much different than paying the dealer markup or fabrication fee. So I look at the LEAP as a "forward hedge"
If you wish to eventually buy 1,000 ounces, it might cost you 16,000 plus $2 for fabrication and dealer markup. So you can buy the LEAP while you are saving the money to eventually buy the physicals. Paying $2,000 now for 10 SLV LEAP contracts can lock you into buying silver at 16 an ounce.
If you have saved the $16,000 by next year, your LEAP options will enable you to enjoy the price appreciation that you might have missed out on if you just waited to save the money and then buy. If silver is at $25 an ounce next year, you would need $25,000 plus to buy the 1,000 ounces. But had you bought the 10 LEAPs now, then you can sell the LEAPs, get the $9 per ounce gain, and apply that to the physical purchase. In effect, even though silver might have risen to 25, you still only need to pay the $16 that you saved. The value of the LEAP call will have appreciated sufficiently to protect you for the price increase. Does that make sense? It's called a forward hedge.
Thanks for your comments/questions
BobbyBanksX
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@Glewis54, Very much appreciate your response and understand the forward hedge play.
What are your thoughts on how SLV performed today after starting with such a depressing start?