No, not against the SPY, which has not bounced as far as hoped. But against silver… errr that is against the 3X bearish silver ETF, DSLV. It’s a hyper long in silver. Crazy, I know. But the 19.50 to 19.75 support target was there for a reason, which was to see the punishment of the hype surrounding an over bought silver-gold ratio. That is all cured now.
I’ll tolerate some grinding in the zone, but I want to see silver turn soon. I’d like to have the strength to remain short DSLV since these leveraged funds devalue over time compared to the asset they are geared to. So if silver turns and burns, it could work well. We’ll see. I just decided to go this way instead of buying call options on SLV this time.
Here is the formerly recalcitrant silver-gold ratio, having gotten back in line nicely.
An eventual turn back up in the silver-gold ratio could spell relief in the broad market as well. I am only short Spain now and wanting to be short more items. But it’s a day at a time market with ongoing evaluation. It’s a pretty enjoyable market too, because things are moving and they are generally moving the way I want them to.
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