Silver Turkey
[29/11/25] [T]
As well as scribing only the structural, longer-term, often-optionalised trade ideas, I will start posting the shorter-term tactical [T] trade ideas, which are more often cash expressions and with much shorter horizons. Starting Jan ‘26, I will update a ‘carousel’ daily, with tradeable events, market dislocations and themes. This will give a more complete picture of overall trading activity for those wanting to follow along higher-touch.
Misery amongst the bears - not just the AI species - but most cross-asset products across the liquidity spectrum are ripping into month-end, A) invalidating many of the month-end portfolio rebalancing signals in the FX space and B) highlighting/exposing some serious liquidity issues as market-maker warehousing appetite is reduced over the holiday period and CTAs execute on signals nonetheless. A great example of this is the multi-sigma move in XAGUSD through the 54.40 double-top - with liquidity exacerbated by a CME ‘cooling outage’. As AI darlings, US indices and precious metals resume their parabolic trips north in tandem, I believe the latter is suffering from this Thanksgiving ‘liquidity breakage’, with a 6% low-high intraday move, likely continuing on the Monday open, but getting into snap-back territory as exhaustion is met by equilibrium. Whilst I don’t doubt the ultimate direction and the debasement theory more broadly, I think there is good asymmetry to start fading this move in anticipation for mean reversion as liquidity returns into next week. A low time-frame deployment on a strategy that should, over time, be high sharpe.
Trade expression of choice:
Sell XAGUSD 56.50-57.50. S/L 59.00. T/P 55.00 (just above the double-top and where I suspect buyers will now lurk). Risk 2.5% to make 4.0%. 50% usual size - volatility adjusted.
Update [02/12/25]
Following the 56.50 Monday open, the XAG 56.50>58.85>56.50 round trip in 24hrs leaves us short at 57.75 average, with the stop loss level confirmed at 59.00. Risking $125 to make $275+.
Update [02/12/25]
Cover 50% XAGUSD into the futures close (58.40). Bitcoin +7% (the positive correlation with XAG during the last AI deleveraging episode was a good bonus thesis for this trade, as crypto nosedived to begin the month, but the main view was for a quick liquidity correction of the Thanksgiving break) and the USD rally intraday (in the ccy space and in XAUUSD) not feeding through into the XAG illiquid gap-closure I had expected. 56.50 this morning felt excitable, but the daily 4%+ swings of late are an energy drain, albeit tradeable in small size. In G10, I am considering a core USD short trade over the turn of the year, which dovetails with this tactical position reduction. Not yet pulling the trigger, but prefer to be flat than have a USD short expression on at the moment. Happy to reduce the risk 50% and instead cancel the 55.00 TP on the balance; looking for a more ambitious pull-back should the 50% balance survive. 59.00 SL remains on 50%.
Update [05/12/25]
Stopped out of 50% balance of position at 59.00.
