timwest
Long

Silver setting up a long term buy signal

BATS:PSLV   SPROTT PHYSICAL SILVER TRUST
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1
Note the chart and how I suggest entering this market. The market has to be a bit lower in order to provide the entry. However, I would suggest selling puts against cash, which is also known as "covered puts". I have recommended this before and it turned out successfully. If you search SLV here at Tradingview you will see my other charts on SLV .

I like to layer the put strikes across the months and the prices I have outlined here.

Selling December 12 puts.
Selling February 13 puts.
Selling March 14 puts.
Selling April 15 puts.

I haven't checked to confirm that all of these options are available, but you get the idea. If you are unfamiliar with options and this is uncomfortable for you, then I suggest reading about it and learning. I'd be happy to teach you.

Either way, this is a long term trade that projects out six months in total. I believe the stop loss is acceptable at roughly a 75% retracement of the current advance from the low near $11 this summer.

Now that we have had a nice selloff after QE infinity was announced, I'm imagining a slow rebuilding process that occurs over the next few months where people essentially forget about silver and gold , but during that time long term buyers will accumulate their positions and the market will be set-up for the next big advance into mid-year next year. I think it could happen no matter who chosen as President of the U. S.A.

Cheers.

Tim 5:11PM EST, Thursday, October 18, 2012
Subscribe to my indicator package KEY HIDDEN LEVELS $20/mo or a discount for a year and join in the trading room KEY HIDDEN LEVELS here at TradingView.com

Comments

Even though there are no options for PSLV, the entry price of $12 has been good. If options were available, assume you could have received between 2%-4% for those options or 24 cents to 48 cents for an entry closer to $11.76-$11.52 net. That is still a decent return for a few months of no work. That works out to an annualized return of (2 months holding period = 6 per year possible = 6 x 2% or 6 x 4% = 12%-24% returns for providing this insurance. I think that is a healthy rate of return.
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PSLV (SLV, Silver) reached down to the ENTRY LEVEL on this trade recommendation this morning. I have read as many articles since last Thursday about the sentiment in the silver market and I think this is the time to step in and buy and increase commitments to silver. 10:57AM EST Tuesday, Oct 23, 2012 PSLV 13.04 last
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