Yesterday was Palladium (https://732charts.substack.com/p/palladium-pops), today it’s silver. There’s a theme forming in the commodities space.
Few notations here -
A near 7 year base which broke out in July 2020.
A 3.5 year downtrend from August 2020 through March of this year. The breakout of which occurred at the confluence with the AVWAP from SLV 0.00%↑ all-time high all the way back in 2011.
It’s chopped around that range since, and is now above the AVWAP from the April’s breakout level (buyers in charge).
If the breakout point is used as a downside risk management level, the risk/reward potential on the trade can be as high as 3.8x on a move back to former highs. Not saying that will happen, but am saying that it doesn’t need to in order to have a favorable expected value trade.
Here’s how the GLD 0.00%↑ movement played out -
Measured moves were mentioned in this March piece -
Silvers turn?