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The Silver Market has been noted by many traders for possible manipulation perhaps due to the Hunt brothers attempting to corner the Silver market back between January 1st of 1979 to January 8th of 1980. This set off the regulators to adopt the “Silver Rule 7” and it began a chain reaction of shifting allocations with the Hunt brothers losing a possible $1.7 billion. While the Silver market has been relatively sedate in most of the following years, 2011 held a move up to $49.80 per ounce. To look back, there does not seem to be a catalyst that comes to mind. That is the thing about the Gold and the Silver alike. The metals may be an emotional market usually derived from the need to direct allocations to a safe-haven. The recent US Dollar downtrend facilitates a possible move-up in the metals. The dollar and the precious metals usually will have an inverse relationship. Strength in the dollar may pressure the Gold and Silver and vice versa. Central banks and other entities buy and sell US securities across the globe. Foreign entities may have purchased about $15.1 billion in US assets. The allure of the US Dollar has been its strength as a premier currency with the International Monetary Fund. The onset of China also now having their currency approved as a premier currency with the IMM changes the perspective of the dollar. It still holds a premier status, but it is not alone. China’s total reserves of assets may be about $1.2 trillion with only perhaps 1.1 % of the reserves in Gold. China perhaps imported about 407 tons of Silver in May alone. The Perth Mint in April 2017 sold about 10,490 ounces of Gold bars and coins and about 468,977 ounces of Silver coins and bars. Silver as an industrial metal is even more favorable in this environment. The Photovoltaic and ethylene oxide sectors may increase demand as the Silver is used in the global solar panel installations. Both the US and China may be increasing their consumption as the “green” environmental needs come into play. The US Mint sold about 911,000 of the one-ounce Silver American Eagle coins in the month of June so far. In April, 835,000 were sold.
The Trump victory has pressured the metals as the expansionary optimism increased a “risk on” atmosphere in the marketplace. The current political arena has made the potential expansion questionable as the new health care reforms are paused. With this in mind, we look for a move up on the metals.
This next week will be vital to the move in the Silver market. Next Friday, we have the US Employment Report for June. The (December) contract is selected due to a seasonal trend of past years. The jewelry manufacturers may purchase more of the metals to ramp up for Christmas sales.
Technically, we see a bullish mode unless the support of $16.436 is penetrated. The upside target may be $17.762. The point of control or comfort area for the December Silver may be $16.776.
December Silver Chart
QST Chart 6/30/2017 6:00 PM CST
This may translate also to an option trade!
Buy one $20.00 Silver (December) Call for 0.112 or $560.00. This expires on November 27th of 2017. One may sell the option once acquired for a possible higher or lower premium. The risk is the option premium plus the commission and fees.
Accepting new clients! (Minimum $25,000 accounts).
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE PERFORMANCE. THE RISK OF LOSS IN TRADING FUTURES CONTRACTS OR COMMODITY OPTIONS CAN BE SUBSTANTIAL, AND THEREFORE INVESTORS SHOULD UNDERSTAND THE RISKS INVOLVED IN TAKING LEVRAGED POSITIONS AND MUST ASSUME RESPONSIBILITY FOR THE RISKS ASSOCIATED WITH SUCH INVESTMENTS AND FOR THEIR RESULTS.
YOU SHOULD CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR CIRCUMSTANCES AND FINANCIAL RESOURCES. YOU SHOULD READ THE “RISK DISCLOSURE” ACCESSED AT DANIELSTRADING.COM. DANIELS TRADING IS NOT AFFILIATED WITH NOR DOES IT ENDORSE ANY TRADING SYSTEM, NEWSLETTER OR SIMILAR SERVICE. DANIELS TRADING DOES NOTE GUARANTEE OR VERIFY ANY PERFORMANCE CLAIMS MADE BY SUCH SYSTEMS OR SERVICES.
STOP ORDERS DO NOT NECESSARILY LIMIT YOUR LOSS TO THE STOP PRICE BECAUSE STOP ORDERS, IF THE PRICE IS HIT, BECOME MARKET ORDERS AND, DEPENDING ON MARKET CONDITIONS, THE ACTUAL FILL PRICE CAN BE DIFFERENT FROM THE STOP PRICE. IF A MARKET REACHED ITS DAILY PRICE FLUCTUATION LIMIT, A ‘’LIMIT MOVE’’, IT MAY BE IMPOSSIBLE TO EXECUTE A STOP LOSS ORDER.WHEN INVESTING IN THE PURCHASING OF OPTIONS, YOU MAY LOSE ALL OF THE MONEY YOU INVESTED.
WHEN SELLING OPTIONS, YOU MAY LOSE MORE THAN THE FUNDS YOU INVESTED. STRATEGIES USING COMBINATIONS OF POSITIONS, SUCH AS SPREAD AND STRADDLE POSITIONS MAY BE AS RISKY AS TAKING A SIMPLE LONG OR SHORT POSITION. A PERSON CONTEMPLATING PURCHASING A DEEP-OUT-OF-THE-MONEY OPTION (THAT IS, AN OPTION WITH A STRIKE PRICE SIGNIFICANTLY ABOVE, IN THE CASE OF A CALL, OR SIGNIFICANTLY BELOW, IN THE CASE OF A PUT, THE CURRENT PRICE OF THE UNDERLYING FUTURES CONTRACT OR UNDERLYING PHYISCAL COMMODITY) SHOULD BE AWARE THAT THE CHANCE OF SUCH AN OPTION BECOMING PROFITABLE IS ORDINARILY REMOTE. YOU SHOULD BE AWARE THAT IN THE EVENT YOU LIQUIDATED THE LONG SIDE OF A BULL CALL SPREAD AND STILL MAINTAINED THE SHORT OPTION POSITION, THEN YOUR RISK WOULD BE UNLIMITED. A PERSON CONTEMPLATING PURCHASING A DEEP-OUT-OF-THE-MONEY OPTION (THAT IS, AN OPTION WITH A STRIKE PRICE SIGNIFICANTLY ABOVE, IN THE CASE OF A CALL, OR SIGNIFICANTLY BELOW, IN THE CASE OF A PUT, THE CURRENT PRICE OF THE UNDERLYING FUTURES CONTRACT OR UNDERLYING PHYISCAL COMMODITY) SHOULD BE AWARE THAT THE CHANCE OF SUCH AN OPTION BECOMING PROFITABLE IS ORDINARILY REMOTE. FOR CUSTOMERS TRADING OPTIONS, THESE FUTURES AND/OR FOREX CHARTS ARE PRESENTED FOR INFORMATIONAL PURPOSES ONLY. THEY ARE INTENDED TO SHOW HOW INVESTING IN OPTIONS CAN DEPEND ON THE UNDERLYING FUTURES PRICES; SPECIFICALLY, WHETHER OR NOT AN OPTION PURCHASER IS BUYING AN IN-THE-MONEY, AT-THEMONEY, OR OUT-OF-THE-MONEY OPTION. FURTHERMORE, THE PURCHASER WILL BE ABLE TO DETERMINE WHETHER OR NOT TO EXERCISE HIS RIGHT ON AN OPTION DEPENDING ON HOW THE OPTION’S STRIKE PRICE COMPARES TO THE UNDERLYING FUTURE’S PRICE. THE FUTURES CHARTS ARE NOT INTENDED TO IMPLY THAT OPTION PRICES MOVE IN TANDEM WITH FUTURES PRICES. IN FACT, OPTION PRICES MAY ONLY MOVE A FRACTION OF THE PRICE MOVE IN THE UNDERLYING FUTURES. IN SOME CASES, THE OPTION MAY NOT MOVE AT ALL OR EVEN MOVE IN THE OPPOSITE DIRECTION OF THE UNDERLYING FUTURES CONTRACT.
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HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM.
ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADE PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF THE HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS.
EXAMPLES OF HISTORIC PRICE MOVES OR EXTREME MARKET CONDITIONS ARE NOT MEANT TO IMPLY THAT SUCH MOVES OR CONDITIONS ARE COMMON OCCURRENCES OR ARE LIKELY TO OCCUR. STRATEGIES USING COMBINATIONS OF POSITIONS, SUCH AS SPREAD AND STRADDLE POSITIONS MAY BE AS RISKY AS TAKING A SIMPLE LONG OR SHORT POSITION. YOU SHOULD BE AWARE THAT IN THE EVENT YOU LIQUIDATED THE LONG SIDE OF A BULL CALL SPREAD AND STILL MAINTAINED THE SHORT OPTION POSITION, THEN YOUR RISK WOULD BE UNLIMITED.YOU SHOULD CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR CIRCUMSTANCES AND FINANCIAL RESOURCES. YOU SHOULD READ THE “RISK DISCLOSURE” ACCESSED AT DANIELSTRADING.COM. DANIELS TRADING IS NOT AFFILIATED WITH NOR DOES IT ENDORSE ANY TRADING SYSTEM, NEWSLETTER OR SIMILAR SERVICE. DANIELS TRADING DOES NOTE GUARANTEE OR VERIFY ANY PERFORMANCE CLAIMS MADE BY SUCH SYSTEMS OR SERVICES.
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In systems trading, Leslie runs a spread sheet of a number of systems to monitor the trends of the systems themselves. She believes in filters to increase probabilities. Perhaps this part of her was found back in college when she proficiencied out of statistics.