First of all . . . silver is up in the futures market at 2:33 AM, Friday, 21 March 14. Last print was for $20.35 an ounce
Let's get into the daily chart for silver:
Let's get into the daily chart for silver:
(Click chart to enlarge)
Note the following:
1. A very easy to read uptrend channel - perfectly parallel - suggests an easy channel for old and new bulls to play. Buy when silver touches but does not finish below the bottom line of the channel. Sell when it approaches the top line of the channel.
2. Notice to that silver's 50 Daily Moving Average (simple DMA) is about to cross above and over the 200 Daily Moving Average. In trading circles this is know as "the Golden Cross".
3. Note too that recent volume on the past four "down" days was below average or above average. Looking at the volume since February, most "above" average days dame on days when the bulls were in charge buying.
4. And silver, as of yesterday's close of $20.28 per ounce, is still trading above the close of $19.43 per ounce on the last trading day of 2013, which last years was December 31st.
5. Lastly, silver is up 4.2% since Dec. 31, 2013. Gold, however, is up 9.3% since Dec. 31, 2013. Will the laggard begin to catch up with the leader?
Keeping this all in mind I have initiated the following buy into a highly leveraged Silver ETN: (Nasdaq: USLV) VelocityShares 3x Long Silver ETN.
Before I show that chart here is how I am playing this bet:
1. I took a good hunk of capital and set it aside for this particular trade.
2. I took that capital and divided by 15.
3. For illustrative purposes let's round the capital off to $15,000.
4. I bought the close yesterday on the USLV chart with my first $1,000.
5. If and only if USLV closes lower today (Friday, 21 March 2014), I will scale in again, but this time with $2,000 more of the capital.
6. And, if needed, the next three scale ins would be $3,000, $4,000 and $5,000 - and I'd only make those scale ins on corresponding closes which are lower than yesterday and today's close.
7. This is called simply the Rock's (1,2,3,4,5) Scale In Method.
As I am pressed to do some "homework" for my real job, I won't go into the pasting of the USLV chart here. Just know that it pretty much follows the silver chart, but with a lot more leverage.
What I am hoping for today is another close below Thursday's close. I really would love to purchase more USLV shares at cheaper prices.
Let's see what today's close brings, and then I'll repost the Silver chart with no intel below in the comment's section or with a whole new post. I should also have time to post an updated USLV chart by then...
Rock
Over and out
