Weekly Hot Take - Stairstep
15/01-19/01
Welcome all!
Hello everyone, and welcome to the new year! Over the past 2 weeks, I have been backtesting several methods to get an even better edge on timing. I am happy to say that this has delivered great success. To keep it as simple as possible for the reader, we will present charts as usual.
If you like the weekly hot takes, make sure to grab a subscription by clicking the button below:
Precious Metals
XAUUSD
(Monthly)
While there is an extreme amount of chop in the shorter-term charts, the monthly charts keep pointing in one direction, upwards. It’s all about that monthly close above $2079, imo. That will finally seal the deal and pull silver higher. We are way above the monthly EMAs as well, so it makes perfect sense that we’re shaking out the overleveraged players first before the trending directional move starts.
Let’s look at the weekly for two important pathways:
(Weekly)
I’m seeing two scenarios coming up next. The geopolitical issues are escalating again with Taiwan - China, Russia - Ukraine, and Palestina - Israël. As we all know, this is a scenario where the metals thrive, thus explaining both upward trajectories. The risk here is that we make another DCL at $1974, which is pretty well defined as support. The opportunity here is that we burst higher as we accelerate in the coming weeks and months towards $2300. I’m staying fully bullish on the metals, with $1974 as a hard stop.
(Daily)
Higher lows and higher highs, great bullish pattern. Even though it seems that we are going nowhere, we continue in this upward pattern. Building energy for the next big move. First target is monthly close above $2078 and then straight towards $2300 with the previous resistance now as support.
XAGUSD
(Monthly)
Here we are just chopping sideways, ignoring all regular bull or bear patterns. This remains a matter of the major resistance zone $26 and the major support zone $22. We are not investing in silver longs or juniors until we get a more clear signal on direction. Otherwise, silver juniors are dead picks. I will only make an exception for certain alpha plays that happen to have some silver as well.
(Weekly)
On the weekly chart, we are below the EMAs, which is a bearish signal. We are looking towards $22 dollars on silver unless we can recover the EMAs successfully. I’m kind of expecting silver to recover the EMAs given the geopolitical issues and timing of daily cycle lows. However, my approach to silver remains that we are not investing in it anymore unless we break and hold above $26.
(Daily)
I’m expecting another ICL soon, and with the current DCL lower as previous one we could be well underway to complete an ICL decline in silver while gold remains to have a very strong chart.
Summary
No more investing in silver (beta) juniors until there is more clarity in the market.
Stick to alpha-gold (and copper) plays! Which has been an extremely profitable strategy in this bear market.
Keeping a good chunk of cash for new opportunities and for the scenario where the geopolitical issues would cause a crash before we breakout higher.
If you enjoyed this week’s hot take, make sure to like & subscribe! Hopefully the strategy is clear & we can all stay away from the deadly bear market in the silver juniors.