Briefly: in our opinion, full speculative long positions (150% of the regular position size) in silver is justified from the risk/reward point of view at the moment of publishing this Alert. We are moving the profit-take levels for silver and the USLV higher.
Just a quick note to let you know that we are moving our profit-take levels for silver, and the USLV higher. The reason is the overnight breakout above the declining resistance line based on the two January highs combined with overall strength in gold and silver relative to the USD Index.
The USD Index continues to be ripe for a (likely sharp) correction that could easily trigger a quick upswing in the PMs. The last time the USDX made such a quick pullback, was at the end of January. It declined by about 0.8, to which gold responded by rallying about $30 and silver rallied over $0.50. This move in the USDX is yet to happen, which suggests that the short-term potential in gold and silver is quite notable. Since silver moved higher recently even without USD's help, it seems that can rally further once it gets this help.
On an administrative note, we didn't plan to post any Alert today, as it's a U.S. market holiday, but the situation requires that we update you anyway, so we do. This week's flagship Gold & Silver Trading Alert will be posted tomorrow.
As always, we'll keep you - our subscribers - informed.
To summarize:
Trading capital (supplementary part of the portfolio; our opinion): Full speculative long position (150% of the full position) in silver is justified from the risk/reward perspective with the following stop-loss orders and binding exit profit-take price levels:
Silver futures: profit-take exit price: $18.19; stop-loss: $17.24; initial target price for the USLV ETN: $94.97; stop-loss for the USLV ETN: $82.95
Long-term capital (core part of the portfolio; our opinion): No positions (in other words: cash)
Insurance capital (core part of the portfolio; our opinion): Full position
Thank you.
Sincerely,
Przemyslaw Radomski, CFA
Editor-in-chief, Gold & Silver Fund Manager
