Silver, the waiting game

Silver, the waiting game

Luckily, it is not necessary to time market entry and exit precisely. What is essential is calculating risk itself and that risk to expected returns. In addition, strict management of the trade itself is required.

Gold versus Silver in US-Dollar, monthly chart, risk versus reward:

Silver, the waiting game - 1

Gold versus Silver in US-Dollar, monthly chart as of November 12th, 2021.

That being said, instead of getting distracted by a narrative of policymakers who might prolong the inevitable even for years possibly, we focus on the technical aspects that cannot be “rationalized” away and will be unaffected by market influencers.

One such fact is the market relationship between silver’s more giant brother gold. The chart above tries to illustrate that gold is trading 10% below its all-time high. On the other hand, silver is trading 50% below its all-time high.

This discrepancy makes silver the more desirable play (better risk/reward-ratio). The difference will work like a loaded spring, and once released, silver will outperform gold by a multiple.

Gold in US-Dollar, monthly chart, gold leading strongly:

Silver, the waiting game - 2

Gold in US-Dollar, monthly chart as of November 13th, 2021.

Now that we have found the right vehicle for a wealth preservation insurance play, we are looking for additional factors. Physical acquisition is a clear prosperous choice. It protects against inflation and the risk possibilities inherent to fiat currency, with much historical evidence.

That leaves us the question of entry timing. Especially since the physical purchase has a broader spread and a reactionary lag over spot price trading, which is pretty much instant. The chart above clarifies why we see there to be leeway regarding being “right.” It is less critical to pinpoint the absolute lows versus overall participation. Especially since a lack of physical silver availability, which is a possibility, would erase the whole play.

The monthly gold chart above is a strong indication that precious metals might be breaking to the upside. With this month’s strength, price pushing against the upper resistance line (white line) of a bullish triangle, silver prices mutually trailing higher is likely.

Silver in US-Dollar, monthly chart, closely following gold:

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Silver in US-Dollar, monthly chart as of November 13th, 2021.

With these necessary positive edges in play, we can now look at silver itself and look for possible low-risk entry points.
The monthly chart shows mutual strength over the previous gold chart. Silver has pushed successfully through the problematic distribution zone around the US$24 price level. It still faces POC (point of control), the highest volume node of our fractal analysis, looming above US$26.03.

With this many edges in our favor, we find this an excellent spot to add to physical silver holdings from a long-term holding perspective.

Silver in US-Dollar, weekly chart, spot price play:

Silver, the waiting game - 4

Silver in US-Dollar, weekly chart as of November 13th, 2021.

For a spot price play in the midterm time horizon, we are instead waiting for a possible price bounce of POC. A low-risk entry would be granted once the price retraces back into the US$24 to US$24.50 zone.

Silver, the waiting game - 5

Silver, the waiting game - 6

Reyna Silver encounters multiple high-grade sulphide zones within 54.9 metres of near-source style skarn at Guigui:

Silver, the waiting game:

In market movement, we see expansion and compression, much like an oscillator. At certain times though, may it be a natural or man-made disaster, we can find ourselves in a stretched or amplified move. These times of abnormality from a time perspective require being well-prepared. Swift, disciplined actions following a clear planned roadmap are advised. An anticipated roadmap strictly followed. It is first a waiting game followed by quick action, both psychologically challenging environments.

With physical acquisitions of metals, perfectionism in timing is paralysis. Not necessary to come out ahead. We find silver accumulation at this time to be a prudent measure to protect your wealth. Like buying insurance against an anticipated market turn.

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This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting.

Korbinian Koller

Korbinian Koller

Outstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent.Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.