Aggressive participation, why?

December 12, 2019

 

As much as we use a technical analysis dominated approach toward the markets, it would be foolish to not have those views guided by fundamentals. It is at this point in time a true confluence point of world wide events that drive our aggressive participation in the silver market. This with the goal in mind, to accumulate a larger than usual long term silver holding. Aggressive participation, why?

Imbalances:
  • India, China and Russia have for an extended period of time exceeded the demand side of gold and silver versus the annual supply production

  • A trade war stirred by the US government

  • A stock market bubble fueled by cheap credit

  • Massive debt due to long term aggressive money printing

  • Possibly manipulated precious metal prices by the largest banks in the world, leading to price levels falsely presenting an intact economy

One doesn’t have to be a rocket scientist to assume consequences out of these factors so bluntly present. Pairing these facts with a historical review through charts add to a higher likelihood of a market correction. As humans we quickly forget the past, but a reminder of events in 2008 and their consequences is timely.

For both, traders and investors alike, we see opportunity in the silver market that justifies a more than usual aggressive approach in participating in the silver market.

 

Daily chart, silver/US Dollar 12/03/2019, “aggressive participation and risk out”:

 

Silver in US Dollar, daily chart as of December 3rd 2019

 

We took an aggressive daily long position on November 26th in silver. A week later we reached our first target and took partial profits.

 

Aggressive participation, why? Daily chart, gold/US-Dollar 12/03/2019, “financed for profits and risk mitigation”:

 

Gold in US Dollar, daily chart as of December 3rd 2019

 

We added to this precious metal sector exposure by also taking a gold position one day after that. Targets for mitigating risk on the trade were similar to silver met on the 3rd of December.

 

All our trade entries and exits were posted in real time in our telegram channel.

 

Silver/US Dollar 12/04/2019, daily chart, “stopped out for beta, volatility and relative weakness”:

 

Silver in US Dollar, daily chart as of December 4th 2019

 

The day after risk mitigation/profit taking, silver due to its volatility and beta behavior got stopped out with the rest of its position at break even entry levels. Later it also proved to have relative weakness towards its peer gold.

 

Gold/US Dollar 12/11/2019, aggressive participation-why? Daily chart, “gold survived retracement”:

 

Gold in US Dollar, daily chart as of December 11th 2019

 

The gold position luckily did not get stopped out. It survived the price retracement with its remaining 50% of position size.

 

As much as we see in silver the higher odds with profit targets as high as 50-100 US-Dollar and relative low risk to the downside, the picture in gold is mutually attractive. Avoiding shortfalls through volatility, beta, sector rotation and principles of relative strength/relative weakness to name a few (all previously elaborated on in our weekly chart books), motivates us to take positions in gold alike. Our long term view in this case of wealth preservation and overall portfolio risk mitigation by increasing our holdings in the precious metal sector supports our aggressive partaking in the markets.

 

Aggressive participation, why?
 

In our humble opinion, the marriage of fundamental evidence of imbalances and the stacked odds of probabilities in charts, point towards a low risk opportunity on the largest time frames. As such we are aggressively reloading on smaller time frames to build a long term silver positions of substantial size.

 

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