Market Timing Update for the Silver ETF (SLV)

Silver as represented by SLV moved back  above 37.72 (which was a breakout point) and is now trading at 39.10.   Yesterday silver began a bit of a swoon because Europe was a bit quieter and the sense was growing that the folks in Congress will be acting like grown-ups and pay their bills on time.  Take a look at the 15 minute chart and then I’ll comment.  PLEASE  CLICK THE CHART TO ENLARGE IT.

SLV ETF Chart

Silver making it's way up

(Chart from FreeStockCharts.com.  It’s a great site to look at these shorter term intraday charts and is brought to you by Worden Brothers. )

The SLV is a bit above the point I printed the chart aboveThe SLV ETF  has pulled back a couple of times, dipping below the moving average shown three times on the way up as indicated by the green arrows.  This shows you why you need to either:

1. Trade out AND then get back in on the recovery, which takes a lot of trading time.

OR

2. Allow for the pullbacks as part of the acceptable “noise” in the chart.

What I do is to examine the volatility for anything I am buying and account for that level of volatility before setting up a stop loss.  If a stock or ETF drops 1% regularly in an uptrend, it pays to have your stop be somewhat greater than 1% if you intend to buy it.  Otherwise, you’ll have to be very precise in your timing.  But do decide in advance where you will exit.  I know that some of you find that tedious, but your ability to make money in the markets is not determined just by entry points; it is greatly effected by your exit points.  They can neither be too tight or too wide or you will likely destroy capital.

Print out or bookmark my “Buying checklist” if you have never seen it and go through the bullet list at the bottom before buying anything at all: The Must Ask Questions Before You Buy

If you “liked” this post, could you please “Like” it below at the blue plus sign and retweet it if you wish?  Thanks.  I appreciate your support.  And if you have any comments about the silver market be sure to leave them below.

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Standard Disclaimer: Remember, it’s your money and your decision as to how to invest it.
© 2011 Wall Street Sun and Storm Report, LLC All rights reserved.

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