Little Sioux Corn Processors -

Overnight, the Precious Metals are slightly higher after Friday’s washout.

As we near the end of the month or quarter, it’s crucial to note that traders often make significant last-minute adjustments to their positions. Given Silver’s remarkable 17.45% increase leading up to Friday, we observed some degree of liquidation. On the equity side, however, money managers appear to be seizing the opportunity of the correction to strengthen their positions, indicating their sustained interest in equities despite the recent all-time highs.

What to Watch this Week

Monday

– ISM Manufacturing exp. 49.7 vs 49.2 in the previous month

Tuesday

– JOLTS job openings exp. 8.3M vs 8.5 in the previous month

• Factory Orders exp. 0.7% vs 1.6% in the previous month
• Durable Goods exp. 0.7% vs 0.7% in the previous month

Wednesday

• ISM services exp. 50.9 vs 49.4 in the previous month

Thursday

• Initial Claims exp. 215k vs 219k in the previous week.

Friday

• Unemployment Rate exp. 3.9% vs 3.9% in the previous month
• Non-Farm Payrolls exp. 185k vs 175k in the previous month

Precious Metals

Looking at the chart pattern we emphasized on Silver last week, where the “double-top” was held, this week, we will keep an eye on the “double bottom” forming on the charts. From my experience, when small speculators are all “long,” traders often begin to liquidate or reduce positions just below the previous high in the case of the double top. They get anxious and often feel a sense of relief by liquidating early.

Where in the case of a double bottom, as we approach the second low, traders often times continue to add to positions while placing “stop losses” below the previous low. When one stop loss is triggered, it becomes a market order to exit. This snowball effect often times leads to a lower low on the charts, seemingly taking out the previous low. That small overshoot, frustrates traders while entices bargain hunters to step back in. As the market begins to recover, those stopped out often re-enter at higher levels than their stops, causing an uptick in volatility.

From my experience, replacing stop losses with short-dated protective puts can sometimes give you the protection you need without the worry of a stop loss being triggered.

Precious Metals

Gold futures broke through the 50 DMA, where 2359 will likely act as short-term resistance. Above that level, quite a few areas act as headwinds (please refer to the Morning Express). Traders will not want to see a close below 2328, where a larger correction may result.

Silver futures show heightened volatility, with $1.02 as the daily average true range. Psychological support remains at $30, and only a washout down to $29.14 causes a genuine concern.

Keep an eye on momentum stocks such as Gamestop, AMC, and Cryptos. Traders are chasing high beta this morning, and the possibility of a broadening rally into Silver could be in the cards.

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