This will be your last chance to get in on the gold and silver bull from an easy risk-reward proposition. In short, you can buy gold under its 2011 highs again and silver is still absurdly cheap relative to gold.
As always miners are the way to go for the largest potential gains.
I will use the rest of this blog post to solidify a personal and very risky trade idea that I will put on with this dip if the right conditions present themselves.
I am monitoring SILJ Calls that will expire in November with a strike price of $20.
The thought process…
- I am extremely bullish precious metals from dips
- Precious metals miners exhibit the most leveraged way to play precious metals
- Silver junior miners exhibit the most leveraged way to play precious metals miners
- Options exhibit the most leveraged way to play silver junior miners
- SILJ is an index so my bet will be top-down based, but bottom-up hedged
- Trump needs liquidity to pump the stock market in order to get elected (If stocks are up in the 3 months leading to an election, then the incumbent party has won the last 17/20 elections)
- Liquidity should be flush until November
- Next Fed Permanent Open Market Operations (POMO) Release Date is 8/13/20 at 3Pm
When to pull the trigger? Need confluence of below…
- US30YR move to 1.391%
2. TIP move to $125.33 with a bottoming pattern
3. GSR retest 82
4. SILJ – May nibble the option on the Fib and eat on Long Term Support
5. SIL – Watch for bottoming formations on FIbs or Support
6. Silver at $22.885
7. PAAS (Largest component of SILJ) at $28.71
Prices today…
Performance Profile as of today…
Options are risky because if you are wrong you can lose 100% of your investment. I may not put this on. Still thinking.
Let me emphasize again.
Buying gold and silver related investments on 8/12/20 and 8/13/20 before 3Pm gives you a chance to front run potential FED liquidity. The safe bet is always to wait for the release and then act accordingly.