Silver : Dead cat bounce to US$ 39 or near, then a pullback to US$ 28-30
May 22, 2011 Leave a comment
So TFEX have silver for us to punt now. Sorry, but no thanks. Why not you may ask? Well here’s our reasoning. Silver is a killer due to the spreads (talking spot silver / silver futures here, not TFEX). A small mistake costs dearly, and we, like many others prefer to trade gold and copper. With such huge volatility, we would not dare trade unless we have 24hr access. Gaps common in silver will swallow you alive.
We view spot silver with extreme caution. A dead cat bounce to 38.500-39.500 is possible, and will of course kill plenty shorts if it does so this week. However in the near term we think there’s a good chance for it to dip to 30 and possibly nearer 28, so we are looking to short from near term strength around 39