Silver - B-Wave Top?After the stunning drop in silver prices, wiping you any hope of a Bull run, a number of indicators have led me to turn bearish. Price ran up to the 50 Day EMA and struggled. Price retraced a bit more than 50% of its decline, failing to make it past the .618 retracement level, an action that would indicate more bullish price activity to come. Stochastics had been in overbought area and is starting to turn down. It has not yet given a sell signal as Stochastics should break below 80 for that to occur. For me the key indicator to sell premium was an indicator that can be reflected to some degree in the BBW indicator. I track price data on an Excel spreadsheet on various time frames. This number reversed in the 4, 10 and 20 day time frames. This indicates that the upward price momentum has stopped and prices will either drift to the trend line or go to the opposite extreme.
My 20-day trend-line comes in at 13.62. That is the first level that I can expect price to hit. Prices could go much lower though if this move is the start of a Major C wave down. It's possible that price could test the $10 level! That's what the Fibs show. While this seems improbable as there is scarce physical supply in the metal, Computer algorithms are not programmed to look at fundamentals.
While I sell options on the paper side, I continue to buy physicals on a regular basis, as they become available, without regard to price. I've seen silver premiums as much as $9 above spot. Still holding the LEAPs. That gives me a good base to short options against with minimal margin requirements. If we do get down to the $10 level on the paper side, I'll load up on the $10 2022 LEAP options, assuming that physicals will never be available at this price.
