MM49 - Silver MSL Lesson
Hello everyone. Today I want to talk about my silver trade again, and I am going to do a quick touch on SpaceX at the end because it ties into the same idea. This is not financial advice. I am not a licensed adviser. This is simply how I trade every day, and I share it to educate.
A few weeks ago, in MM44, I placed a modified synthetic long on silver. Since then, SLV has pulled back to its 200 moving average, and a lot of questions came in from the community. They all asked the same thing. Are you repairing or adjusting your modified synthetic long?
So this Market Minute is really a lesson. It is not about chasing a move. It is about how and when I adjust an MSL, and the rules I follow so the decision is never emotional.
Here is the mindset before we get into the mechanics. I will rarely get the perfect entry, and I have made peace with that. What I am confident about is that if my narrative has not changed, and on silver it has not, I am very good at adjusting and repairing my trades to more favorable levels. When I place a trade, I already know my next move. That is the chess game I always talk about. Today I am going to show you exactly what that next move looks like.
Where We Are
SLV is sitting right on the 200 moving average, that line in the sand I talk about all the time. I have a confluence buy signal, and my mean reversion is deeply stretched to the downside, around -1.6 to -1.7. Optimized trend has turned blue. The only real obstacle is the 200 moving average itself. We are right on it, and it would be ideal to get back above it and close above it for a few days. But I am close enough to start making adjustments.
My next support below here is around $49. That is old resistance turned new support. It does not mean we get there, but we are much closer to the bottom than we were when SLV was up at the highs.
When I Pull The Levers
This is the most important part. I do not adjust when we are neutral in the middle of a range. I pull my levers when the market is stretched, when mean reversion is stretched, and when the math tells me to do it. Right now all three line up, so this is where I start to work.