Gold/copper/oil/silver: A March silver-squeeze recommendation
Whata great way to start November with Equities making new all-time highs, the U.S.creating more jobs than expected, and the dreaded Fed meeting behind us. Itappears on the surface that the Fed was much more accommodative thananticipated, considering when Bernake tapered, Equities fell 5% that week. Goldfutures are back at $1815 and need to clear two more three-star majorresistance levels 1825-1829***, 1836*** before clearing the way for anotherpotential run back to 1900+. Gold bulls will need to watch the 10-Year yield,which fell to the lowest level since September 27 at 1.451%. Any rally in the10-Year yield can disrupt this recovery by steepening the yield curve, and the"Big Banks" will target Gold and Silver again. We recommend clientsto position with Silver call spreads going out to March and balancing any longGold futures with 10-Year put spreads.
Daily March Crude Oil Chart
We still believe that Crude Oil presents itself as a top "commoditypick" for the remainder of 2021 and into the first half of 2022. Notsurprisingly, OPEC+ ignored the requests from Oil importing countries such asthe U.S. to boost production; instead, they decided to maintain its current400,000 barrels per day output. The selloff leading into the announcement andrise in Oil volatility (OVX) has provided us with the opportunities to positionourselves to catch the tailwind rally we expect well into 2022 as airline androad travel surge. We will implement a strategy for clients new to futures byfocusing on the March 100 barrel contract scaling down to the 50%retracement. If you would like to learn moreabout technical analysis, we have updated the guide to provide you with all thesteps to create an actionable plan used as a foundation for entering andexiting the market. You can request yours here:5-Step Technical Analysis Guide to Precious Metals.
DailyCopper Chart
Copperhas recently been the victim of the Chinese economic slowdown, with Evergrandestill in the picture and Covid grabbing headlines. We believe that China hasbeen selling off Copper stockpiles, therefore, suppressing prices. The Covidcase count stands at 800, and with a population of 1.4 billion people, we feelthis headline will drift away as vaccinations rise. We recommend clients scaleinto Copper down to the 38.2% Fib retracement and hold for a retest of 4.51 onthe charts. I just completed a new educationalguide that answers all your questions on how to transfer your current investingskills into trading "real assets," such as the 10 oz Goldfutures contract. You can request yours here: Trade Metals, Transition your Experience Book.
DailySilver Chart
Being fully aware that Silver will probably disappoint, treasury yields willprobably rip higher, and the big banks will clobber us like a rented mule, I'mwilling to bet that most of you are having FOMO from the recent price surge offthe lows. Now, most of you are "physical" Silver holders, and that'sgreat; so am I, but the only thing I want to do is create compoundable wealthat this stage of my life. I want to buy Silver, have it rise and sell it, andbuy something else. I don't want to lug around 5,000 ounces (312.5 pounds) in asuitcase to a pawnshop or sell it on eBay. Therefore, we recommend thosesuitable clients with 110 days till expiration buy the 5,000 ounce March Silver$26 - $29 call spread for 40 cents or $2,000 a piece plus commissions/fees. Themaximum gain is $15,000 minus commissions/fees and achieved if Silver closesabove $29 at expiration on February 23, 2022. The maximum loss of $2,000 pluscommissions/fees occurs if Silver at expiration is below $26 an ounce onFebruary 23, 2022. If Silver does move higher before expiration, we canliquidate the spread any time the market is open for a potential gain. Rememberthe last "Silver Squeeze" occurred was on a Sunday night when thefutures and futures options were open, and those that waited for the "U.S.Equity options" open were left disappointed.If you have never traded futures or commodities, I just completed anew educational guide that answers all your questions on how to transfer yourcurrent investing skills into trading "real assets," such asthe 10 oz Gold futures contract. You can request yours here: Trade Metals, Transition your Experience Book.
By Phillip StreibleContributing tokitco.com
Follow @KitcoNewsNOW
phil@bluelinefutures.comwww.bluelinefutures.com