Trade view /
25 July 2016 at 8:46 GMT
The price of the Silver Miners ETF (SIL:arcx) has been moving higher off the lows set in January. The advance has been quite fierce and the trend is pointing strongly to the upside, so the most recent dip in price presents an opportunity to go long for a short-term trade.
This far into a cycle, we can start to pinpoint possible turning dates from a time cycle perspective. These dates don't have to turn the trend, but they are important inflections points or obstacles. The last cycle lower into the January lows took 97 days, and we are now looking for relations to this cycle.
The next full swing alignment is found on day 190 of the advance, which is on July 29. The next cycle we are trying to find is from the May 31 low, which marked the 131st calendar day of the bullish trend. The next relation from this perspective is found on day 57 from May 31, which is July 27. So now we have an interesting time zone into which we should ideally move higher.
From a price perspective, this market has managed to find some support at the $46 Gann pivot, which is important for the short-term outlook. To the upside, we have resistance at $53 and $61.
The overall picture of more upside also fits into the wave count, as we can only count three waves higher off the May 31 low, and we would expect a last and final thrust higher.
Management and risk description
The plan is to buy SIL:arcx above $46 for a move higher towards $53 over the next couple of days. The target is $53, and the stop is a daily close below $46, or alternatively, a hard stop at $45.50.
The risk to this setup is a break of $46, which opens up a potential move lower to the $43 and $39 pivots.
Entry: buy above $46.
Stop: a daily close below $46.
Time horizon: 2-4 days.
SIL:arcx daily chart
SIL:arcx daily development chart
— Edited by D. Deacon
Non-independent investment research disclaimer applies. Read more