To The Moon

Silver has shined in the past week. While recording close to double-digit gains in a single week, it has also helped silver break through the $30 integer mark that has suppressed it for a long time. After 4 years of silence (shock), what does silver mean for the breakthrough of key resistance, and is it possible to chase high of silver price now?

The trend starts, looking for callback buying opportunities

The first thing that needs to be confirmed is that when the trend starts, it is necessary to abandon the inherent thinking of the past, and at the same time have a certain degree of confidence in the extended market.

As shown in the figure below, the performance of silver in the past few years has significantly lagged behind that of gold. Gold has set a new historical high slightly, while silver has hovered below 30 in the previous four years.

Now with the price breakthrough, the short-term short squeeze has actually been fulfilled to some extent last week. Whether there will be further short squeezes depends on the choice of silver bulls on the one hand, and on the other hand, it will also be related to the performance of gold..

At present, the price of gold is only one step away from hitting a new high, which implies that silver has a relatively large chance of continuing to rise. Under this assumption/premise, you can consider buying silver in the form of buying call options. The advantage of this is that there is no need to think too much about the potential stop loss point and the sharp drop of false breakthroughs.

Conversely, if gold fails to reach a new high this week or there is a bullish trap, silver will undergo a certain degree of correction and decline, which will be a better cost-effective opportunity to go long. The retracement at the 30 position will provide key support. As long as the trading is maintained above 26.25, the current round of silver market will not end easily.

This is one of the important topics we expected before: when the precious metals market enters the oxtail stage, silver has the opportunity to start later and then there will be a supplementary market.

Now it seems that silver has already shown initial signs of catching up from behind. According to the inherent XY axis mode of price and time, the faster the rise and fall, the shorter the duration; Slow bulls or negative declines will last relatively longer.

Our previous plan was that the market would advance at a relatively uniform rate before the U.S. election, but if it rises too fast from the second quarter, we need to be wary of the head coming earlier and faster. At present, the end target of gold will be at least above 2600. If it is strong enough, there is a chance to further touch above 2800 US dollars.

Although there is still some distance between these prices, if they really want to accelerate, they will actually be within a moment. At the same time, by referring to and matching the performance of silver, you can make a choice as soon as possible. Of course, it is definitely not considered to easily short against the trend. Any left-hand trade guessing the top is extremely aggressive and risky until a large head is confirmed.

Next, for us, what we have to do is still to hold on and wait for the bull market to advance. When the price reaches the desired level and sees a significant supplementary increase in silver, make a decision on whether to lock in profits according to the timing of the market. If the market moves relatively slowly and provides some opportunities for pullback/retracement correction, you can buy bottoms and go long appropriately.

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