Has Silver Bottomed & Turned Bullish
New York (Oct 23) Silver Futures in the December contract broke out to 4 week highs finishing up $.50 cents an ounce to close around 22.78 hitting new recent highs as the U.S dollar has fallen to 1 ½ year lows bringing back memories of late 2010 when commodity prices surged to the upside as the start of the QE3 programs pushed prices higher and traders are thinking once again that the Federal Reserve is going to continue to print money for quite some time pushing metal prices higher in recent trading sessions.
I have been recommending a long position in silver for quite some time & I do think there's a possible retest of the $25 level from last summer & I do think with economies around the world strengthening and demand for electronics increasing that silver has real potential to head back up into the $30 range relatively soon in my opinion. If you're looking to get long the silver market I would look at either a bull call spread in the option market or look at buying the outright futures contract placing a stop loss below the 10 day low which is at the double bottom of 20.50 risking around $12,000 per contract on the large 5000 ounce or $2,300 on the mini 1000 ounce contract. The trend is your friend in the commodity markets and I've seen the silver market be one of trendiest markets in the world especially to the upside & when it starts to catch fire it literally can move dollars in a week and I think there's a possibility that silver has bottomed in the long term. Trend: Higher.