Brace yourself
Right now you might find yourself in this first moment of catching a breath. You might have started getting used to a work from home. In addition, you might be feeling more prepared having stacked up on essentials. Maybe you even got used to this new world revealing itself. We pointed out in our last weekly silver chartbook how important it is to be in a stable emotional condition for high value decision making. This is especially true since markets are counter intuitive. You need to use your cognitive functionality to make a good trading plan. Intuition most often will lead you astray. We assume a stable state is now reached. However, we also think this is the time to Brace yourself.
Covid-19 is not the root of the problem. It only started a multitude of domino cause effect models to tumble. A dangerous game is to take too long emotional breathers between the effects of these individual domino events. Don’t allow them to emotionally paralyze you. In case you can find a moment of clarity now, grab it by its tail and act. If you study past economic events in a time of a pandemic, you will discover, that finding oneself in a victimized situation has been cause to much suffering for individuals. Proactively getting in charge and staying in charge of your future is key.
At this point, it matters little at what high probability low risk entry point in what time frame you participate. However, prepare! Getting ones feet wet is what could make the difference to truly strike when everything lines up.
Silver Weekly Chart: Brace Yourself
Silver in US Dollar, weekly chart as of March 27th, 2020
The weekly chart shows good strength (above 0.382 Fibonacci retracement) on this tweezers bottom (yellow circle).
It would come at no surprise recent lows to be retested in the near future. (a double bottom formation in the US$12.50 price zone would be considered a low risk entry zone)
New lows can easily be printed as well.
Silver Daily Chart: Various Scenarios
Silver in US Dollar, daily chart as of March 27th, 2020
The daily chart shows three scenarios:
If you followed our telegram channel, where we post our trades in real time, you are well positioned and already enjoyed substantial profits (including additional reloads not shown in this chart).
Assumes a speculative price advance with an entry zone after a pullback.
Anticipates an immediate price decline with a low risk entry zone.
Brace yourself
Last weeks bounce created new technical data usable for reentry points. After the initial three week drop, there is more clarity in charts. Now is the moment to plan for the future. Not at the time when a new down leg in the market is happening and you get bombarded with negative news again. Proactively planing, for example hedge portfolio remainders by collecting double digit dividends in oversold oil stocks in the mid term, can be a passive strategy to avoid disaster. Above all, we believe strongly that silver prices over the long term are one of the finest ways to counteract a multitude of problems financial systems will be confronted with in the future.
Part of these opportunities already show their hand. Simply google e-bay sales prices of physical silver coin and bullion. You will find sales already priced near 100% over its paper value.
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