Silver - An Awaken Giant ?! - 7/1/2016

1 ביולי 2016

Silver is ready to take on $20 level. An attempt to break that resistance might be thwarted initially but seems like this could has silver lining ;) We dabbled with half hearted longs near 15 level at the beginning of the year but the confirmation of solid support at 16 has liven up the things. Silver has traded roughly around $5 during 90s but that was so prehistoric. Now it looks like $10 - $15 range is a new normal. And if you have long term view and patience to hold it, there will be some insanity every decade or so which can give enormous returns. Now everybody has started picking up on silver but it may not be too late yet. Of course you don't go all in from one point so now during the pullback from 20, support levels of 18.50 and 18 will be interesting. Fed is sidelined for remaining of the year plus more easing from BOE and BOJ is the perfect recipe for silver to touch $25 mark in coming months. Well, if ECB surprises with a dovish stance then who knows, months target can be achieved in days or even in hours !
There are all sort of strategies you can apply. Going outright long on futures contract is one way but not advisable to put all allocated money like that. We are long 'SLV' ( Silver ETF ) with call debit spreads and put credit spreads to finance the calls. Besides some outlandish out of the money calls too, in case ;)
Glad that silver is back in vogue !
Our Gold longs are doing great so far. If today we get rallies towards 1350 then we are inclined to take advantage in offloading some GLD ( Gold ETF ) call positions because of long weekend in USA.