Disclaimer

I'm not a financial advisor nor a broker/dealer. I neither provide financial advice, nor make investment recommendations. Nothing you read on this website constitutes a solicitation, recommendation, or promotion of any particular security, transaction, or investment.
I may at times discuss trades or trade setups, but this is meant to be purely a discussion point for entertainment and educational purposes only.

Friday, January 27, 2012

Intra-Day Silver update

Silver made a minor new high this morning.

Assuming that my ending diagonal wave count shown above is correct (ok a big assumption considering my recent performance with silver) going back to the 1/13 low of 29.42, we just completed the fifth wave this morning, and should see a sharp downside reversal that retraces the entire diagonal in 1/3 to 1/2 the time it took to form.  Notice how perfectly we tagged the upper line connecting iii.  In my experience, one of the guidelines of alternation relating to diagonals makes likely that at least one of the five waves will be complex.  Normally it's the third, but in this case it was the fifth (or subminuette degree v).  Notice also the lower relative momentum compared to wave iii.  This bolsters the fifth wave count.

That means that we should see 28.62 on the SLV by 2/2 or 2/3 at the latest.  I decided to sell SLV 32/34 VERTICAL CALL SPREAD here.  Collecting $0.95 in premium  will help minimize the damage I sustained with my short trade.  Of course, the flip side is I just made things worse if silver continues to grind higher without any sustained correction.


Both of my trades in silver are defined risk if the worst case scenario plays out.  It will definitely sting, though.

Anyway, always honest, let's see how it goes over the course of today and Monday.

9:20am MST update
I adjusted my downside price target.  I was looking at the futures instead of SLV when I first wrote this update.
Posted by Waverunner (FractalTrader) at 7:58 AM

No comments:

Post a Comment

Subscribe to: Post Comments (Atom)

Notation


Wave DegreeMotiveCorrective
Grand Supercycle((I)) ((II)) ((III)) ((IV)) ((V))((a)) ((b)) ((c))
Supercycle(I) (II) (III) (IV) (V)(a) (b) (c)
CycleI II III IV Va b c
Primary((1)) ((2)) ((3)) ((4)) ((5))((A)) ((B)) ((C))
Intermediate(1) (2) (3) (4) (5)(A) (B) (C)
Minor1 2 3 4 5A B C
Minute((i)) ((ii)) ((iii)) ((iv)) ((v))((a)) ((b)) ((c))
Minuette(i) (ii) (iii) (iv) (v)(a) (b) (c)
Subminuettei ii iii iv va b c
Micro((1)) ((2)) ((3)) ((4)) ((5))((A)) ((B)) ((C))