News, analysis and commentary for gold traders and investors

"Be Right - Sit Tight"

Jesse Livermore
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Gold Market Wire

News, analysis and commentary for gold traders and investors

Silver Market Update

Silver Faces the Channel High Challenge

October 21, 2021 - (Gold Market Wire) - It's been quite the week for Silver. The move up has been strong and notable. This is the type of action that serious bull markets begin with. Anyone recently positioned short has been roasted - properly, and will have some very burned fingers. Those who traded out of more long-standing shorts are running for the exits and covering.

Score one, and a big one, for the bulls. There will be more of this coming in the future. But, for the trading position, now, in the immediate picture, we have the upper end of our down trending channel setting up a challenge. Will we blast through or back off to gain the energy to blast through later? Those are the real questions, in our humble opinion.

...the channel marker. Can we clear it?

We tried to get above yesterday and closed right on the line. The challenge couldn't be clearer. This morning we repeated the process and backed off a little. Without trying to call every twist and turn, a pullback on Thursday (i.e. today) could set the stage for a roaring end of week close through the target. That's not a 'prediction', merely a comment that markets like to work that way. The few pullbacks we had, and there sure weren't many gave us a chance to add some extra length to the trading position. We must avoided the pitfall of 'over-trading' at this juncture, and so, we rest with what we have.

power uptrend still holding.

It's worth noting at this stage, for those who believe we are starting the next, and likely final, stage of this 20-year bull market, that it is always best for margin players - those people who like to watch their lives flash before their eyes - to establish leverage at the beginning of a major move and then sell it off to let the position 'run-free' over time. We are establish our trading length this way, in full understanding that trading Silver is, in itself, a leveraged position; and leverage is a sword that cuts both ways!

We also note, in retrospect, that the ducking and diving out of our core position worked - but it wasn't an easy task. Now with our core re-built, we intend to sit with this one for what we think will be a considerable time. It looks like we aren't going to see $18.50 or $15.00 again. That is what gives us the risk/reward ammunition to add to the core if we get another pullback this week. After that build it will simply be, we hope, the discipline of trading a proper bull market. Buying incrementally on pullbacks, and sell out of part of the position on string rallies - while maintaining a core position. Within that mix, our (recently) established leverage will be worked off. With that said, let's not get ahead of ourselves. We still need to take everything a day at a time.

Long and strong is definitely the theme for now. We're prepared for a pullback, as the market has run hard - but we are committed to holding all length as it stands right now.

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