Using the Alchymist data lab we are able to view all instances throughout history where Silver (or any other Commodity/Future) traded down over 3% on a single day. Using our front end interface it takes about 10 seconds to pull this data.
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What we see is that going back to 2008 a loss of 3% or greater in a single session has happened 174 times.
5 trading days later prices were higher by 39 cents in 70% of all instances, while trading lower by only 25 cents in the 70th percentile. So Bull Bear betting odds in the 70th percentile are roughly 5:3 in favor of Bulls. We love placing these types of bets.
A close above 17 by weeks end is probable, and would completely reverse the negative sentiment created by today's hit.
Action to take:
Watch for follow through selling undercutting today's low of 16.58..Remember, 70% probability we trade down 25 cents from here - Then if/when prices reverse back over 16.50 place long bets.
Hedge with a 16.50-15.75 put spread which will cost you approx 20cents. Sell the 17.50 call for 10.5 cents, reducing the cost of your hedge to 10cents, and leaving you upside of approx 90 cents for a R/R of approx 9-1.
If you like trading with the odds and making high probability futures bets, visit our website to see how the Alchymist Data Lab can dramatically improve trade selection/ winning %, and Risk/Reward ratios.