Silver has more stubbornly resisted the tug of gravity than gold, but the 21.44 downside target remains a logical short-term price objective nonetheless. An unexpected pop to 23.90 would trigger a 'conventional' buy signal, but until such time as that occurs, we should trade this contract with a bearish bias. Although it seems unlikely the 22.34 low recorded on June 23 will prove to be an important one, it is capable if it endures of launching the futures to as high as 28.56.
The way sellers crushed p=22.92 on June 21 leaves little room for optimism that this correction will somehow avoid falling all the way down to the 21.21 target of the pattern shown. In fact, even a strong rally to the green line (x=23.77) would set up a 'mechanical' short that we should not pass up. The pattern meets all of our requirements for legitimacy but is perhaps a tad too obvious to produce a tradeable low at exactly 21.21. We'll attempt to bottom-fish there nonetheless if and when the time comes, but with a 'camouflage' trigger that allows for some skirmishing ahead of the expected turn. We'll also need to consider an alternative target at 20.98 that would result from treating the somewhat higher 'A' at 26.43 (May 5) as a one-off peak. _______ UPDATE (July 3, 5:55 p.m.): The equivalent downside target for the September contract is 21.44, and a rally to 23.98 would trip a mechanical' short.
July Silver caught a bounce from the 22.06 secondary Hidden Pivot last week, but that won't save it from a further fall to the 21.205 target shown in the chart (inset). That much is clear from Wednesday's crushing breach of p=22.91. The pattern looks too obvious to deliver a precise bounce, but a tradeable turn from very near the target seems unavoidable. So far, the 'natural' trigger interval on a reverse-pattern entry would be 25 cents, but we'll look for alternative ways to get aboard (i.e., 'camouflage'), since the implied entry risk on four contracts would be around $5,000.
The rally from May 26's 22.78 low would become an enticing 'mechanical' short if it touches the green line (x=25.19), as seems likely. Initial risk would be a little more than $4000 per contract, so the trade is recommended only to those of you who know how to cut that by at least 90% using a 'camouflage' trigger. If there is sufficient interest in the chat room, I will provide guidance in real time. We would be shooting not for a drop to 'D', but for a single-level profit predicated on exiting at p=23.946. A fall to D=21.46 would still be a theoretical possibility, however. ______ UPDATE (Jun 16): Yet another week of excruciating tedium told us nothing we didn't know a month ago. Even the crime syndicate that manipulates bullion futures seems too bored to bother. The analysis above can stand as given.
Silver looks likely to fall to a D target at 21.46 that's equivalent to one in gold that seems somewhat out of reach. On balance, I lean toward a bearish resolution, but we'll monitor this symbol closely in any case. A rally to the green line (x=25.19) would trigger an enticing 'mechanical' short, but because the entry risk would be more than $6000 per contract, we should plan on doing the trade with a camouflage trigger that can cut that to $600 or less. If the futures instead fall, bottom-fishing at D would be attractive, although the pattern looks too obvious to deliver a precise low at the Hidden Pivot.
Silver has spent the last two weeks creating disappointment, since all the sturm und drang at what might have been a consolidation level turned out to have been distribution. Still more dispiriting was bulls' failure to take on the 27.29 high from March 11. The flaccid performance suggests the current retracement will have farther to go, although I wouldn't lay odds that it will exceed the 'external' low at 20.12 recorded on March 10, let alone C=17.90. The first bottom-fishing opportunity we might see could come at 21.46. That is the D' target on the weekly chart of the reverse pattern using A=25.10 from Feb 3.
Although I've flagged a potential bottom-fishing trade in June Gold using 'mechanical' levels, July Silver would become a fetching 'mechanical' short if buyers push it up to the green line (x=25.19) this week. The implied entry risk of $6200 per contract would warrant a trick-shot entry using a small reverse pattern, but that shouldn't present a problem for seasoned Pivoteers. Worst case over the next 2–3 weeks would be 21.460, although I doubt sellers have the moxie to accomplish something so dastardly.
Last week's plunge precisely to the red line, a midpoint Hidden Pivot support at 23.95, has validated the pattern and its 21.46 target. This is not necessarily as bearish as it sounds, since the futures will need to exceed p decisively, then close beneath it for at least two consecutive days, to imply they are bound for p2=22.704. For now , however, they would become a spec buy using an rABC trigger, since the midpoint pivot is always a logical place for a price reversal. Please nudge me in the chat room at the appropriate time if you are interested. ______ UPDATE (May 16, 6:13 p.m.): Sinking, soon to drop off the edge.
Silver loves to tease traders by tiptoeing up to old highs and lows, then reversing with sadistic brutality. You'd think the victims would have caught on by now, but if and when they do, the gremlins that animate this vehicle will have moved on to a different, equally nasty game. For all its histrionics, the ABCD pattern that has informed our bullishness for the last two weeks remained intact along with its 27.150 rally target. The futures already tripped a profitable 'mechanical' buy on a pullback a week ago to the green line, and it would trip another if it takes out Friday's low at the beginning of the week. That would amount to sloppy seconds, though, and so I will offer no guarantees.
July Silver has been in a so-far moderate correction of a top two weeks ago at 26.43 that we had precisely anticipated for the May contract. The corrective reverse pattern that I've drawn is probably more bearish than what we'll see, but it should still work for purposes of trading, forecasting and gauging trend strength. For now, you can use p=23.94 as a minimum downside objective. That Hidden Pivot support can be bottom-fished provided you are capable of limiting the risk tightly. A decisive penetration of p would shorten the odds of more weakness to D=21.46. _______ UPDATE (May 1, 10:03 a.m.): Scoundrels, lunatics and short-covering bears inadvertently teamed up before dawn to goose silver into a spasm that has turned the short-term picture bullish. The rally would become still moreso if and when it exceeds the 26.43 peak recorded on April 14. That would bring a 26.91 target into focus (60-min, A=24.26 on April 4). _______ UPDATE (May 2, 7:38 a.m.): The futures just bounced from a voodoo number without having taken out the 24.735 'C' low of the bullish pattern shown in the current chart. They will need to hit 25.12, however, to suggest the rally has sticking power, and 25.36 to get out of trouble. _______ UPDATE (May 2, 6:30 p.m.): The futures easily exceeded my benchmarks (see above), setting up a possible run at the 26.43 peak recorded on April 14.
