SLV Silver Monthly Buy Signal using Time At Mode

The monthly chart in SLV, iShares Silver Trust is revealing a new buy signal that happened after October's price range expanded to the upside.

Silver trades well on the Monthly time frame and has seen many profitable signals in the run-up and collapse. I have not always used the monthly time frame for analysis, but it is definitely an interesting time frame to analyze and trade from based on historical results.

The last distribution zone from 2013-2014 was from 17.75-23.84 ($6.09), which lasted for 14 months with 12 months at the mode of 18.7-19.0. Conservative projection from 19.0 down by $6.09 allow for a move to $12.91 which we have not seen yet. The time of the decline, 12 months, expired in September.

What we do to enter a trade using this methodology is to:
1. Buy over the high of the bar where time expired on the downtrend.
2. Buy a range expansion (September's range was $0.98), so when October was up $0.99 you can enter.
3. Buy pullback's to the mid-point of the range expansion from September's close at $13.87 up to $15.60, which is a rally of $1.73 rally, so the midpoint is $13.87 + $0.87 or $14.74 entry. We sit here at $14.49, so you get a better entry level that the "systematic" approach.

The last buy signal didn't fail, but the sell signal after that worked.

The exit strategy is the high from October at $15.60 and risk a drop under September's close at $13.87.

Tim

14.49 last SLV - 11/3/2015 12:50PM EST

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Great trade setups often take a few times to get right. I know the feeling of "wanting to be right" and I also can see the commodity markets are in a flush-out stage here with Copper pushing new lows. It's a rough time to just "buy and hold" because it looks like "buy and hope". The market drifted under the stop, actually, the very tight stop that I placed on this recommendation. I will stand aside and look for weekly range expansion on the upside to jump on board at higher levels. Historically it is wise to buy dips in silver and sell rallies, but prudence calls for me to say something since SLV went under the stop loss. Re-view every day for the next week for re-entry setups.

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I forgot to re-post on this page, but look at the chart and see if you can see where you would have gotten in using the "weekly range expansion rally" that I mentioned. Look for where the market "ADVANCED" by more than the "PREVIOUS WEEK'S RANGE" and that is your buy signal. The upside target was spot on. Close stops can really hurt trading results, but they limit losses and often limit profits too.

Tim 12/7/2016 1:50AM EST

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Here's the chart with weekly range expansions to re-enter:

The last one is monstrous and it almost hits the target on that bar. Note how none of them were fully retraced until after the target was reached.