ZSL (-2x short silver ETF) offers a very aggressive entry here on what appears to be a late-stage buying climax in silver (as evidenced by volume patterns & the parabolic advance in both gold & silver. My preference is a starter short position here, adding if & when silver puts in a half-decent or better evidence of a reversal (e.g., any of various bearish candlestick reversal patterns). 60-minute chart with price targets (including percentage gains to each target, if hit, to allow for easy calculation of stop-loss orders) below:
SLV 60m Jan 26th
This is a 100% counter-trend, ‘gunslinger’ (very aggressive) trade idea at this time with zero evidence of a reversal. However, price & volume patterns are highly indicative of the final stages of a blow-off top. As such, one should pass if this type of aggressive trade and/or their outlook on silver from this point doesn’t mesh with their risk tolerance or trading style.
I don’t typically post the leveraged ETFs as trade ideas on RSOTC.com due to the inherent decay. However, that same leverage that works against the leveraged ETFs over time in a typical trend, can also work in favor of: i.e., It is not only possible but also ikely that ZSL will gain more than 2x the drop in silver, assuming it falls in a mostly unidirectional, swift & persistent drop, as is typically the case once a parabolic blow-off top ends.
A more detailed explanation & the reasoning as to the rare exceptions where I will favor a leveraged ETF over its non-leveraged counterpart (i.e., SLV in this case) can be found in the FAQ section of rstoc.com under “ETF Related Questions” & then “Is there a disadvantage to holding a leveraged ETF for an extended period of time?”
The RSOTC Position-Size Calculator can also be accessed by clicking this link or the calculator icon towards the right of the top menu bar of the site. Also, make sure to always factor in any leverage (2x or 3x) on ETFs when determining the size of the position to take on a trade (e.g.- someone that might typically take a $10k position in the non-leveraged (+1x) silver ETF, SLV, would take a $5k position in ZSL (-2x) or AGQ (+2x) ultra short or ultra long silver ETFs.