Silver

Like the bounce in gold, silver's rally is suspect because it follows a death-dive that breached two major lows recorded in the final quarter of 2020. That implies the bounce, now in its second week, is corrective, although not quite necessarily doomed. Indeed, it would hardly be unusual for a rally with legs to develop following a dip beneath a support that too many bulls were counting on, as has surely occurred here. However, because quite a few of them will have been stopped out, silver should be sufficiently lightened of profit-takers to climb like an F-22 Raptor. So far, except for the first day's bounce from the low, that has not been the case. But because the rally accelerated as the week ended, we'll give it the benefit of the doubt for now. I will connect up some ABC dots if and when the bounce either surpasses some minor 'external' peaks on the intraday charts  (the first lies at 24.38), or tops and relapses.

The pattern shown in the chart is gnarly perfection, meaning not only that September Silver is likely to fall to at least D=24.04, but that it is just as likely to bounce precisely from it. We'll plan on bottom-fishing there even though the trade could conceivably be out of sync with gold, which looks weaker. A 'simulated' rABC set-up can be used for this purpose, with a= 25.565 on the 60-minute chart at 10:00 p.m. on 8/3. I have added this coordinate to the chart, although you may need a magnifying glass to find it without zooming in on your own chart.  Do not attempt the trade unless you understand it, and realize as well that it could trigger Sunday night -- or not trigger at all if silver gaps below 24.04. ______ UPDATE (Aug 9, 9:26 p.m.): There are just two targets left for this blowout: 21.72 and 21,34, respectively.  Here's a chart that shows the provenance of both. Either or both warrant bottom-fishing with a small-degree 'camouflage' set-up. ______ UPDATE (Aug 11, 8:45 p.m.): I'll be more receptive to the idea that bulls actually intend something if they can push this scow above the 24.39 'external' peak recorded last Friday on the way down.

Ordinarily I would suggest a 'mechanical' short on a rally to the green line (26.19), but there's something so unappealing about this pattern that I'm more inclined to get long, provided we can find a proper set-up to do so.  It's not as though bears have shown much strength or enjoyed much success betting the 'don't pass' line.  The 24.04 'D' downside target will remain theoretically viable nonetheless, but my hunch is that  it will be negated this week with a push above C=26.91.  ______ UPDATE (Aug 5, 10:52 p.m.): So far, my hunch has been wrong. Still, bears have no real power over Silver other than to bludgeon it do death for a couple of hours at a stretch, so I won't get too exercised yet about the prospect of a full-blown sell-off to D=24.04.  That doesn't mean I am hankering to bottom-fish, however. ______ UPDATE (Aug 6, 10:34 a.m.): The futures have gotten pounded so hard today that the 24.04 downside target now looks very likely to be hit. Here's a chart for those who enjoy bottom-fishing. I like the odds. 

The steep rally that occurred between March 2020 and August created an impulse leg with sufficient power that the likelihood of a second rally leg to as high as 40.085 should not be doubted. However, buyers' digestion pains have rankled us for nearly a year, and there can be no guarantees they will end any time soon.  There is still a presumption nevertheless that the futures will achieve a minimum 30.95 (p) without stopping out the 'c' low of the bullish pattern. In the meantime, the best we can do is stake out a long position on the lesser charts when a good opportunity arises. That would allow us to keep half for a swing at the fences. _______ UPDATE (Jul 27, 9:17 p.m. ET): The gnarly pattern shown in this chart predicted the low precisely. But how long will it last? It took the futures six weeks to get there, so the bounce should be more than just an overnighter.  If not, then the next logical step-down would be to 24.04, a Hidden Pivot support that can be bottom-fished in any of the usual ways, including with a bid and a very tight stop-loss.

Silver has lagged gold lately and may need to grope its way lower to find good footing. The chart shown is intended to exploit that scenario with an rABC set-up and a point 'c' low positioned at p=25.46.  This Hidden Pivot support is nicely situated in a 'discomfort zone', since, if you look to the left, there are no prior lows that the hoi-polloi would be referencing for structural support. Because we're playing for a turn from p precisely, I've somewhat shortened the a-b interval of the reverse bullish-pattern.  If you don't trade futures and prefer to use SLV, try a tightly stopped bid at 23.46, a midpoint support equivalent to the one in the futures chart. You could also use 'camouflage', call options or rABC to initiate the trade, but don't stick with it if it goes against you more than a little. _______ UPDATE (Jul 19, 6:14 p.m.): Sellers crushed the midpoint pivot at 25.46, negating our plan to position a point 'c' low there for an rABC buying set-up.  A point 'a' anchored at 25.03, the intraday low, would have triggered a buy at 25.22, with p=25.41, but unless I hear from at least two subscribers who elected the trade, I won't provide tracking guidance. _______ UPDATE (Jul 22, 4:38): Buyers took out one internal peak and two 'externals' on the hourly chart, imply bulls are likely to dominate at least till Sunday evening.

You've got to admire the pluck the futures showed last week in repelling an assault by sellers that should have pushed the August contract down to at least p=25.69.  That would have been a great place to attempt bottom-fishing, but the fact that we were denied the opportunity can and should be construed as bullish.  Assuming the upthrust that ended the week starts the new one by taking out some minor 'external' peaks, we should be able to devise some 'mechanical' set-ups for some profitable rides higher as the futures bid fair to wreck the bearish pattern shown in the inset. Zoom the rightmost abc on the hourly chart down to the 15-minute chart or so  (A=25.92 on 7/9  and at 9:00 a.m. ET) and you'll have your starter kit. This will be a high-odds trade for Sunday night-owls, since the competition, emerging from weekend lethargy, will not be looking for a buy signal quite this subtle. Here's a chart to help guide you. _____ UPDATE (Jul 12, 7:07 p.m. ET): The futures didn't dip low enough to trigger the trade, but an alert chat-room denizen flagged another that would have produced a $3000-or-more profit on four full-size contracts in a little more than two hours. Check his post at 10:19 a.m. to determine whether the opportunity would have suited you. ______ UPDATE (Jul 15, 5:55 p.m.):  Silver is in an uptrend, although you'll need sensitive equipment to detect it.  The pattern shown here, with a 27.15 target, looks very promising for trading and predicting. It already signaled a 'mechanical' entry on Wednesday that was worth a quick $6800 to  anyone who bought four lots 'mechanically' on the 'textbook' pullback to the green line.  

As usual, silver's chart is more encouraging than gold's, but not much. The impulse leg shown in the chart is legitimate, but we should want to see two further signs of health before we allow ourselves more encouragement. First, the spasmodic rally that tested bulls' patience on Friday needs to exceed the 'D' target at 26.77;  then, with no pussyfooting, the futures must surge above the 27.36 'external' peak I've highlighted in the chart. Otherwise, expect more tedious ping-ponging between uninspired bulls and enfeebled bears. ______ UPDATE (Jul 8, 10:35 p.m.): This one is for rABC-savvy traders only, since I am not about to advertise its proprietary details explicitly. Suffice it to say, p=25.69 in this chart is ideally situated in the discomfort zone to set up an rABC long that I rate '7.9'.  Try a=25.94 (7/8 at 3:00 a.m.), and don't hesitate to give it a second try if you get stopped out. ______ UPDATE (Jul 9, 8:18 a.m.): So far no trade,, since the futures must come down to at least 25.70 to enable the rABC set-up noted above. The potential opportunity remains viable.

Silver's tiresome slog since December in a $6 range should have worn out bears by now, but truth to tell, bullish support has been irresolute, if not to say feeble. Bullion would be soaring these days if everyone were as certain as a thousand 'experts' and the news media that rampant inflation is coming. Do Powell and some other unlikely dissenting voices perhaps have it right when they say the worst has been discounted by stocks and other assets, and that reckless fiscal spending growth has peaked? From a technical standpoint, the only appealing trade on the immediate horizon is a lowball bid at 24.33, the 'D' target of the pattern shown (see inset).  The strategy has been a non-starter so far, though, since the July contract has not even traded below p2=25.47. Reversals precisely from p2 are 'supposed' to exceed 'C', negating the patterns themselves.  In this case, however, the sharp bounce we might have expected has failed to materialize, casting doubt on the likelihood of a powerful rally.  On balance, I am moderately bullish, but also bored half to death.  My wake-up alert is at 27.33, just above an external peak of no particular distinction.

Silver could get off easier than gold if the 24.33 target shown is the worst that sellers can do in this presumably minor bear cycle.  There's even a chance the turn could come from 25.47, a secondary pivot that can be used for bottom-fishing with a 'camouflage' setup.  In practice, this would entail drawing a conventional abc pattern on a chart of lesser degree to trigger the trade once the July contract has touched 25.47.  I'll also mention that, according to the tenets of 'Matt's Curse,' if the futures turn from within an inch of p2, the reaction rally has a good chance of exceeding C=28.90 of the bearish pattern.