Recently I’ve written about silver futures (in the blog here) and soybean futures (in the nightly STI trade setups email, email me: shoffman at danielstrading.com for a trial). Both are still interesting markets; I thought I’d revisit them.
The daily March Silver futures chart is below. In Wednesday’s blog post I said I would rather be long silver than gold futures; today is bearing that out. On Wednesday I pointed out that 1813.3 is a 50% retracement of the December selloff, so breaking that level would be bullish longer term.
click to enlarge
The past two days’ action has borne that out. Yesterday saw a test and recovery over that Fib level, for the fourth day of bullish (low to high intraday) action. Today silver saw the same early action as yesterday – a test of the Fib support, matched the low exactly then a strong rally. They rallied after the December payroll report, and are testing psychological resistance around 18.50 late in the day. For comparison, Feb. Gold futures have not yet been able to break above resistance at Wednesday’s high (see the chart below).
click to enlarge
Wednesday saw a breakout setup on Wednesday. This actually was an unfulfilled breakout setup from Tuesday. Thus, for Wednesday we were looking for a breakout of Wednesday’s range as a ‘go with’ move. In this case we were selling a break below Wednesday’s low of 1051-0. My first downside objective was a 50% retracement of the rally off the 12/22 low; this price was 1033-4.
click to enlarge
This break of 1051 occurred Wednesday night; and the close was 1026-0; well under the 1033-4 Fib support. This meant we were likely to see further downside today, which was in fact what we got. (On the flip side today, I would have viewed a move back over 1033-4 as a sign of a short term bottom).
The two takeaways:
- Buy the strongest market in a complex; sell the weakest. Don’t trade for things to ‘average out’
- .Normally I like to follow the Taylor Technique cycle for trading, but there are times when under factors overwhelm the cycle; being cognizant of these factors can improve your swing trading results.
This is a sample of the analysis from my Swing Trader’s Insight advisory service. For information on STI, and to sign up for a free two week trial, visit here.
The information contained here includes information from sources believed to be reliable and accurate, but no guarantee is made as to accuracy, nor do they purport to be complete. Opinions are subject to change without notice. Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
Copyright © 2009
This feed is for personal, non-commercial use only.
The use of this feed on other websites breaches copyright. If this content is not in your news reader, it makes the page you are viewing an infringement of the copyright. (Digital Fingerprint:
f2ea78dd95959aa32f651cec20a16e23)
