With Silver in the throes of a correction about to enter its fourth week, my immediate outlook is cautiously bullish. The December contract has already triggered the bottom-fishing trade advised in December Gold (see above), and made a so-far low at 30.490 that came within 7 cents of stopping out the trade. Rather than tying the two vehicles together, however, we'll adopt a different perspective that implies Silver will fall to the 29.495 target shown in the inset before it can turn around. A decisive breach would imply more slippage to as low as 28.455, a number given earlier as my worst-case correction target.
Correcting the reverse pattern shown has taken December Silver below the 'hidden' midpoint support at 33.63, implying it will likely require a move down to p2=32.91 for the futures to regain their footing; or even to d=32.19. In fact, a snap back rally to x=34.35 would trigger a 'mechanical' short, even if my enthusiasm for initiating the trade would not be high. If the retracement does hit d=32.19, though, it would be an excellent opportunity to bottom-fish with a tight stop loss. ______ UPDATE (Nov 2): The futures danced to our beat last week, triggering a 'mechanical' short at x=34.35 that would have evinced little pain. Now they are on their way down to d=32.19 of this pattern. You can bottom-fish with a reverse-pattern trigger that uses a= 33.26 from Oct 25. That implies a 72-cent trigger interval, but you can reduce it by perhaps 95% by using a pattern from the 5-minute chart or less. _______ UPDATE (Nov 6, 8:26 p.m.): You can still try bottom-fishing using the 32.19 'd' target to set up a low-risk trigger, but this chart shows what to expect if 'd' fails to hold. Worst case for the intermediate term could be as low as 28.455, but there's no reason to assume it will be that bad unless sellers start crushing p and D/d supports of different degree.
Friday's surge surpassed minor Hidden Pivot targets with such ease that there's little doubt December Silver will achieve the 37.485 target shown in the inset. The pattern is a degree smaller than the one presented here last week, which showed a 37.249 objective tracing back to the start of the covid hoax in March 2020. Although price action at p has been less than decisive, the fact that the rally provided no opportunity to buy a pullback to x=29.535 'mechanically' further implies the target(s) will be reached.
Buyers on Friday impaled the 31.74 midpoint Hidden Pivot resistance of the bullish pattern shown, all but guaranteeing the rally will reach a minimum d=32.505. If the futures get past it as easily as they have p=31.74, that would portend not just a test of the 33.25 peak recorded on October 4, but a breakout above it. The rally would then encounter the 'D resistance of a bigger pattern at 33.33, giving us another opportunity to assess the trend's staying power. A bigger picture provides high confidence that the December contract will eventually reach 37.249, a 'D' target on the monthly chart derived from a pattern stretching back to A=12.871 recorded in March 2020.
See Friday's chat room discussion for a detailed explanation of a 33.23 forecast for this vehicle last Wednesday that caught the top of Friday's spike high and a so-far 94-cent plunge within half a penny -- a single tick. One contract shorted at the top could have produced a gain of as much as $4700 in a little more than two hours. Looking just ahead, I have used a daily chart (click on thumbnail inset) to project a 33.505 target for the next thrust. Although a pullback from Friday's high that touches the red line (p=32.33, a midpoint Hidden Pivot), would trigger a 'mechanical' buy, I am recommending that you attempt this only at the green line, and only if you know how to use a 'camouflage' trigger to cut the $3000 theoretical entry risk by 85%-90%. _______ UPDATE (Oct 8, 12:22 p.m.): The selling has turned ugly this morning, crushing d=30.565 (daily chart a=30.670 on 8/26). The futures are screwing the pooch now after having marginally penetrated the p support of a pattern that projects to as low as 27.65(!) As of the moment, however, the bunco artists who engineered today's shakedown may be able to do no worse than mildly breaching p=30.438. Here's a chart that shows it all.
This week's charts take a step back to show a big picture, and an even bigger one. There is most immediately a 37.249 target that traces back to the bull cycle begun in March 2020. That's when covid madness struck and mutated unexpectedly into bullish hysteria on Wall Street. The provenance of that target is shown in the thumbnail inset. An even bigger picture that began with 8.40 silver in 2008 suggests that the bull market will top out at 53.060. Here's a chart that shows this. You can see that bulls are stalled at the 32.35 midpoint Hidden Pivot resistance. Conquering this barrier will require two consecutive monthly closes above it or a decisive thrust to at least 35. A surge of mania could accomplish this within the next couple of months, but my gut feeling is that it will take significantly longer than that to consolidate silver for a push above 50. There can be no guarantees, however, since all price action since May has occurred off a top that failed to exceed any prior peaks. That means the larger bull phase that tacked on $2.82 since September 2022 is not impulsive. Even so, the power of the A-B leg, which took silver from 8.40 to 49.82 in three-and-a-half years, should suffice to overcome the relative timidity of the C-D leg. We should continue to trade this vehicle with an aggressively bullish bias while remaining alert to the possibility of nasty swoons of as much as $7 that institutional carry traders use to keep their short positions from blowing up and forcing delivery.
No one mentioned the glow-in-the-dark rickism that had our next rally target at 31.730, below the previous one. Is anyone paying attention? Apparently not, but I'll leave Silver on the list anyway, since, without it, I could no longer promote an affinity between Rick's Picks and bullion traders. The December contract looks bound for the 33.435 target shown, but let's wait till buyers punctures p2=31.798 before we jump to conclusions. Pivoteers, please note: There are some voodoo numbers along the way to get short, if only briefly.
My last update left little uncertainty that the December contract would achieve a minimum 31.795, the Hidden Pivot target of the pattern shown. The uptrend looks too steep to allow the one-level pullback we'd need to get aboard 'mechanically', and the pattern is too obvious to allow us to squeeze off a tightly managed short at the target. That would still be possible, however, if you are proficient at constructing trade triggers on the lesser charts (i.e., 'camouflage'). If buyers push past the target, the next would be a Hidden Pivot not far above, at 31.730. It is derived from 'locked' a=26.950 on 5/2 -- by definition the lowest low in this chart capable of producing a reverse pattern.
I’ve been waiting for the futures to fall to the 27,800 'd' target of the reverse pattern shown so that I can get a reliable and precise handle on trend strength. Can a beaten-down Silver summon the moxie to embark on a bull cycle that would challenge May's imposing high at 33,500? If so, it will need to put up a few strong bars on the daily chart, and soon. My gut feeling, however, is that the December contract has languished for too many days just a hair above d=27.800 to imply that it is gathering such strength. More likely is that the futures are fixing to dip below 'd', then test the key low at 26.885 recorded on August 8. _______ UPDATE (Sep 13, 9:41): The futures have spiked precisely to the D=31.04 target shown in this chart. Expect a pullback, but if not, count on more upside to 31.795, a Hidden Pivot calculated by sliding the 'A' low down to 27.06, recorded on 8/7.
Silver's correction since topping at 32.75 on May 20 has created a distinctive channel that grows more ponderous and tedious by the day (see inset). If the July contract falls yet again to the lower line and this happens within the next 4-6 days, that would imply a low near 27.50. However, here's a weekly chart that puts that in a long-term context that is clearly bullish. It shows a stall to have occurred in a logical place, a secondary pivot at 32.41. But even a nasty pullback now to as low as x=23.32 would still be technically constructive and generate a juicy 'mechanical' buying opportunity. I strongly doubt silver bulls will need such a rebuke after a nearly two-year consolidation begun two summers ago, however, and that implies the July contract can be bought 'mechanically' at p=27.873 with a stop-loss at 24.84. This is a theoretical 'do', but I'd suggest seeking guidance in the chat room if the opportunity takes shape.
