Quick chart update on SLV – Silver ETF as the technical picture hasn’t improved. As a technical trader I observe the charts and do what the markets tell me to do. In the case of SLV the technical picture couldn’t be any clearer. Price is putting in one falling top / lower high after another. This is the definition of a downtrend. Another definition of a downtrend is when price is trading below the moving average 200. That’s currently the case with SLV. The MA 200 was somewhat flatlining. It now looks like it will resume its downward slope very soon. I talked about the flatlining MA 200 and the technical implications for precious metals in more detail in my latest Tischendorf Letter Interview.
As a trader in a downtrend you have two options:
- Cash
- Short
Click on chart to enlarge:
Will the downtrend end? Yes. When will it end? Nobody knows. Price will need to recapture the MA 200 for the downtrend to end. When that happens my job as a trader is to reevaluate the technical situation.
Remember: You always have a choice. You can either lose your opinion or you can lose your money. Great traders offer no excuses.
The biggest problem one faces in the market is the need to wait to confirm the trend. The most common and costly mistake is to jump at every first inkling of a rally. In the stampede to be the first to identify a trend, many get crushed. It is the patient ones who wait out the many false starts, who will be fit as a fiddle to make the move when the true trend starts. A lot of money has been lost in trying to be the first one to identify the trend. – Brad Koteshwar
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