Would a rally like the hypothetical one shown in the chart make you more hopeful? Good. Then let's set an alert at 21.31 to tell us when it is appropriate to turn optimistic, if not exuberant. In the meantime, Silver can be traded bullishly or bearishly as warranted, since there is still plenty of money to be made if it merely trades sideways. My latest gold tout is more downbeat than that, however, so you should be prepared to see Silver dragged lower.
Buyers' wilding spree on Friday was even more impressive than in gold. Accordingly, you should use the bullish 'reverse pattern' shown to get long with risk very tightly controlled. Buying should be done on a pullback to p=19.03, stop 18.90, much just as I've advised in December Gold. However, please be aware that you can cut risk even more by setting up an rABC trigger on a lesser chart, with the 'c' low anchored within two cents of p. The midpoint pivot shown is tentative and would change if December Silver moves higher Sunday evening, but the 'conventional' stop-loss would remain fixed nonetheless at 12 cents below the final p used for entry. This trade is easier than it sounds, but it is recommended only for subscribers who have been attending Wednesday tutorial sessions and understand how rABC set-ups work. _______ UPDATE (Oct 24, 5:02 p.m.): See my chatroom posts and chart from 9:55 a.m. Tuesday morning. _______ UPDATE (Oct 27, 7:24 p.m.): December Silver appears to be dragging itself kicking and screaming toward the 20.85 Hidden Pivot target shown, but what a mess!
I'd hoped December Silver would bullishly trash the 'mechanical' short signaled on October 4, when the futures spiked to the green line, x=21.31 (see inset). Unfortunately, the signal proved to be a good one, foreshadowing this vehicle's punitive relapse toward a 16.84 downside target that has been in play since June 13, when the futures were trading for around 21.30. The pattern is gnarly enough to use for bottom-fishing, notwithstanding the possibility that my advertising it here will diminish its usefulness. _______ UPDATE (Oct 17, 9:10 p.m.): A relentless, ratcheting rally has generated a bullish impulse leg on the intraday charts. It was/is tradable with a bullish bias, but if you're keen on knowing when this rally turns real, set an alert at 19.295, just above a challenging peak recorded last Thursday on the way down.
Silver outperformed gold last week with an impulsive rally that exceeded an imposing 'external' peak at 21.02 recorded on August 15. The December contract is still on track to achieve the 22.615 rally target noted here earlier, but it's hardly a done deal. First a technical hurdle encountered at last week's high must be cleared. Notice that the high occurred precisely at the green line (see inset), which lies at 21.31. That triggered a 'mechanical' short that would require a stop-loss at 22.81 (if initiated without 'camouflage'). My gut feeling is that the stop will be hit, which would negate the mildly bearish implications of the stall. Alternatively, the 'mechanical' short would be the winner if Silver relapses to D=16.84. We should monitor the lesser charts closely in the meantime so that we don't have to wait for the big move either way to determine which trend -- up or down -- is dominant.
Bears appear to be struggling, so I've raised the downside target to a less challenging level by lowering the point 'A' high. The new target is 16.96, but there is no compelling reason to think it is likely to be achieved. We won't give up on it officially until such time as a rally exceeds C=21.02, but in the meantime consider the pattern spent for purposes of 'mechanical' set-ups, presumably on the sell side. _______ UPDATE (Oct 3, 6:38 p.m.): Today's sharp upthrust has brightened the outlook for at least the near term. The bullish reverse pattern shown here is a visual oddity, but price action over the last three weeks at p=20.08 implies that the 22.615 rally target is all but certain to be achieved -- probably precisely enough to warrant shorting there.
I've adjusted the downside target to 16.39 in the pattern shown. It has triggered two profitable 'mechanical' shorts at the green line, and although that's no guarantee D will be reached, it does shorten the odds, especially for a test of the p2 low at 17.55 recorded on 9/1. I wouldn't suggest attempting a third 'mechanical' short if the futures return yet again to the green line, since that would put them within the scent of C=21.02 and an opportunity to stop out bears who have been racking up fat gains since last March. One last note: A plunge could find tradeable 'hidden' support at 16.96, a lesser 'D' target calculated by sliding 'A' down to the 22.23 high recorded on June 16.
Silver triggered a 'mechanical' short on Friday, although I'd advised paper-trading this one. I had to redraw the chart to discover that the short was more promising than it initially appeared. I hadn't realized that the 'B' low exceeded the external low from June 2020, making the downtrend more powerful than I'd originally inferred from a cursory glance. In fact, the A-B leg was quite powerful, implying that December Silver will not be able to push above C=20.98 of the downtrending pattern and eventually will fall to D=16.355. Nudge me in the chat room on Monday if shorting silver appeals to you, since we may be able to 'camo' ourselves aboard belatedly with risk very tightly controlled as always. (I would not have recommended using a conventional stop above C in any case, since that would have implied more than $23,000 of entry risk on four contracts.)
Rallies from midway between p2 and D in patterns as obvious as this one usually go further than we tend to imagine initially. Keep in mind, though, that if they reach the green line -- in this case x=21.310 -- that would trigger a 'mechanical' short with excellent odds of producing a profit. We'll go with the flow in any case, which means that the 16.84o downside target will remain our minimum, short-term downside objective unless last week's modest bounce exceeds the 'external' peak at 18.80 recorded August 16 on the way down. _____ UPDATE (Sep 12, 10:17 p.m.): Today's lunatic leap has energized the bullish case while demoting the use of x=21.31 to get 'short' mechanically. I'm in wait-and-see mode, waiting for a sign of whether the rally is for real. ______ UPDATE (Sep 15, 4:19 p.m.): The 'mechanical' short is viable in theory, but I'm going to pass it up. A close above x=21.31 would hint that the really IS for real.
After stalling briefly at p=18.27, the December contract is trying to turn it into support. By merely closing above the midpoint pivot, however, the futures have made p2=18.53 no worse than an even-odds bet to be achieved. A pullback in the meantime to the green line (x=18.00) would trigger an attractive 'mechanical' buy; stop 17.73. The implied $5400 entry risk on four contracts warrants a 'camouflage' set-up on the 15-minute chart or less to reduce the theoretical risk by at least 80%.
December Silver appears on track for push to the 21.93 'D' target of the pattern shown. The odds were somewhat enhanced when last week's dip from just above the red line (p=20.78) failed to provide a 'mechanical' buying opportunity by reaching the green line as required. Don't pass up a buying opportunity if it should swoon to x this week, but check the chat room for risk avoidance guidance before you leap. The rally target lies within a thicket of supply deposited on the daily chart last spring, and so a decisive push through D would be more impressive than usual. ______ UPDATE (Aug 17, 11:19 p.m.): My mild enthusiasm for Silver appears to have been unwarranted, perhaps because I overqualified the impulse leg that seemed to be driving the rally. The last piece of it exceeded no 'external' peaks, even though the launch stage got past some small ones near the bottom of the move. Anyway, the December contract appear likely to abort the 21.95 rally target, and I'm not about to sugarcoat what could happen after that. The disappointing picture is shown in this chart.
