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Tuesday, May 24, 2011

SLV - Beware the Silver Snake

Earlier in May I noticed a bullish inverse pattern setting up on Silver that I initially thought was pointing to a large bounce.  Then last week I realized that my inverse pattern was only indicating a moderate bounce for Silver in the near term.  Meanwhile last week my SPX charts were indicating a hard plunge for Monday/Tuesday - it happened. 

I had decided late last week to play it safe with Silver because I was concerned that the anticipated SPX plunge could lead to a risk-off Silver selloff early this week.  SPX gapped down in a serious way on Monday, but Silver only saw a moderate gap down.   

My inverse pattern correctly called the gap up breakout today and price movements at number 7 and 8 today.  Now, I am just seeing a slow grind up for Silver to top out around $37.  Then I foresee it plunging hard down to my first target at $28.50, and then finally bottoming at $27.   

30min Chart




















The following is the same Intermediate Term chart that I had posted on the weekend.  Notice I had mapped out a small push up for Silver to $37 this week.  That is occurring now.  Beware the Silver Snake -  look what happens next!

4hour Chart

21 comments:

  1. S&P futures down. From the patterns a weak opening tomorrow morning is a great setup to cover S&P shorts and go long for the day. Very likely an up day for mkts tomorrow, I plan to go long Financials early in the morning.

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  2. I'm getting more & more impressed with your work. Where can I read more about market symmetry? Thanks!Jordan

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  3. Very impressed as well. Love this blog!

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  4. SC, here we go, $37.40 on silver - are u about to get short around here? All things considered, very impressive relative strength on silver's part.

    SC, would a $38 break on the upside invalidate your call?

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  5. Thank you for the compliments.

    Jordan, I developed these techniques myself over the years so I am not sure about books on the subject. I will say there is an art and a science to it, and that makes it difficult to explain at times. Often it takes some tweaking to line things up and put the complete puzzle together.

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  6. GL, yes according to plan, still waiting to short Silver. Just a touch early I feel. My $37 target is based on SLV so just a little more to go.

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  7. will be a tremendous call if it plays out as you've mapped, watching intently

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  8. GL I believe the pattern is set, therefore, it won't be invalidated. Silver is an attractive short at this level already. What will be the top tick? The most bullish case I could possibly make would be that SLV hits the pink line at $38.40.

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  9. No guarantee it will get up that high so layering in makes sense.

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  10. I am pretty much focusing on gold spot levels, as I believe a turn in gold will eventually break silver that much harder (if the whole move is to happen at all). However, as of now, silver still exhibiting incredible relative strength vis a vis gold - pretty puzzling...

    As for your layering comment, could not agree more, as this up move was mostly driven by momentum ensued after GS call - as opposed to being the result of full risk-on mode taking place across the board - and, once that fades, we could turn rather abruptly.

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  11. There is more to go on this SPX rally late today and tomorrow. I'll be looking to take profits on the longs and short SPX 1326 area for another drop.

    We're in a tradeable sideways chop for many days now. I'll be updating SPX charts with what to expect next. Mkt is trading well in tune with my patterns.

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  12. maybe 1330 even if it overshoots

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  13. I have been having major trouble trying to post on here for the last 2 days...would not let me log in, extremely frustrating. Silver really looks like it wants to go parabolic on the intraday chart, very strong today, no dips yet.

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  14. Sorry about that Blake. Not sure what's with that glitch. Others have had problems as well. How annoying!

    I would love to see one last gasp of euphoria in Silver.

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  15. I know it looks strong but Silver is a particularly deceiving beast. I like it lol!

    Do people want to hear more about gold? I've been mainly focusing on Silver because it makes bigger swings and great action...

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  16. I am 75% short here, so I would prefer that it just start falling now. It is starting to look bullish on the daily chart. I was long until last night, clearly closed out too soon.

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  17. It's getting close Blake.

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  18. SPX found resistance at my 1326. Might see 1330 tomorrow, I see tomorrow as a flat day in the 1320's, then the next selloff bottoms next Tues. Lower low than this morning.

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  19. there is your 1326 target on S&P. I love your confidence SC, hope you are right on this one. I usually wait for better confirmation on silver before shorting, but you make a compelling chart

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  20. Sold out TZA profits this AM and did well day-trading TNA today. Let see what ZSL does...am also interested in ERY...Jordan

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  21. Dollar down big. Stock may be up tomorrow. Look forward to your new cycle for the market.

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