Traders should keep an eye on silver this week. It’s setting up for a big move.

For the past two months, silver has been chopping back and forth in a relatively tight trading range. This allowed the chart to build up energy to fuel a big move in one direction or the other. Now, it looks like that move will get started soon.

Take a look…

The red lines on the chart show the trading range silver has been in for the past two months. The blue lines show a “consolidating triangle” pattern – which is a series of higher lows and lower highs – that often occurs just before a breakout move. The chart is approaching the apex of that triangle. So, we’re likely to get a breakout within the next several days.

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Breakouts from similar patterns earlier this year led to big price moves. And, we’ll likely see the same thing this time as well.

The question, of course is… Which way?

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The technical indicators at the bottom of the chart aren’t any help. They’re all in neutral conditions. So, they don’t favor one direction over the other. We might as well just flip a coin.

But… seasonal factors do favor the silver bulls here.

For whatever reason, silver has a habit of rallying during the final weeks of the year. Silver gained 8% in the final six weeks of 2017. It rallied 14% between Thanksgiving and Christmas in 2018. Silver popped 8% in the last few weeks of 2019. 

And, it’s setting up for another big move this year.

I think the bulls have the edge.

But, traders should respect a move in either direction. A move above $24.70 per ounce should get a rally started. A move below $23.90 will likely lead to a decline.

Best regards and good trading,

Jeff Clark

Reader Mailbag

Today, Jeff Clark Trader member Raymond and Delta Report member Wei-Zhi share the reasons why they’re grateful for Jeff’s help…

I can’t tell you how irritating it is when another trading editor I follow makes his gains claim based on buying prices I never saw, and selling prices I couldn’t get. In almost every case with you so far, I’ve done better both buying and selling your recommendations than the buy and sell prices in your emails.

It’s not a lot of money right now, but it makes me feel really good that I’m doing better rather than worse. I can’t tell you how good this makes me feel, but I hope that by thanking you like this you might get the idea and feel some of the gratification that I feel. Thank you.

And, you don’t waste your time telling me how well the transaction did when annualized. So, let me share this: the 100% gain you led me to in three weeks is 1733% annualized. That’s definitely a laudatory performance! Thanks, once again. I’m gradually getting comfortable with this, and am starting to see how you really could fund a nice retirement this way.

– Raymond

Doing business nowadays, especially option trading, is not easy – for many of us. I have lost some money, but yesterday for the first time, I had a little gain. I’m glad I have the chance to learn and imitate what you’re doing.

Reading your daily updates are a good enjoyment, one learns a lot. Many thanks for your work and your wisdom.

– Wei-Zhi

Thank you, as always, for your thoughtful comments. We look forward to reading them every day. Keep them coming – and send us any questions – at [email protected].

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