Option Play: COMEX SILVER Reaches Major Support
Source: Market Oracle, Matt McKinney (12/10/09)
". . .if COMEX SILVER can hold here we are going to retest and move through previous highs. . ."
Fundamentally, if the U.S. DOLLAR INDEX continues to rally we could see a change in trend in this market. However, I do not believe that there is any solid reason for the U.S DOLLAR INDEX to sustain a rally particularly because there is so much TARP MONEY left to spend. Therefore I'm convinced if COMEX SILVER can hold here we are going to retest and move through previous highs, but the next few days will tell.
Technically, COMEX SILVER has pulled back to a critical MA indicating a BUY if it holds here. See daily chart below.
OPTION EXPIRY-FEBUARY 26TH
CONTRACT SIZE 5,000 OUNCES
BUY 21.50-22.50 BULL CALL SPREAD
We also buy in a 3-to-1 ratio an outright PUT in case the market makes a MAJOR move against us.