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Bear market in Silver may be entering its next (and final) down phase

April 22, 2014

A guest on the show Peter Brandt sent this post to me today. Peter is very technically focused so he takes us through what he sees in the silver chart below.

COMEX silver

Here is his rundown:

Phase A was the blow-off exhaustion top experienced in April 2011. This blog correctly identified this as an important market top. See here (How do you spell bubble … SILVER, Apr. 24, 20111) and here (8 years of Silver supply changed hands last week, May 1, 2011). The blow off was immediately followed by a 35% price decline — with Silver bulls declaring a conspiracy.

Phase B was a retest of the top, taking the form of a bear wedge.

Phase C, lasting from October 2011 through April 2013, represented a rectangle. Phase D was a textbook horn or sloping top in the final stages of Phase C. It was during this horn, on February 20, 2013 that this blog carried a post titled “What’s happening to the metals – a chart update.” This post predicted a sharp decline in precious metals, specifically identifying a target of $1250 for Gold, the priced at $1570. The completion of the continuation rectangle in April 2013 set a still-unmet target of 1660. Remember, targets are not sacred. Also keep in mind that while I have made some insightful calls over the years, I also have many market pronouncements leading to a over-sized serving of humble pie.

Phase E has been the unfolding congestion since the June 2013 low. This congestion appears to be taking the form of a descending triangle with support in the 1800 to 1850 zone. Should this support give way, then the 1660 target would be quickly met, with a further target down to 1350.

Click here to visit Peter’s site and read his full post.

And you can click here for Peter’s homepage to check out what other charts he is following today.

Discussion
10 Comments
    Apr 22, 2014 22:27 PM

    Cory this is the article I posted this weekend as Matthew and I were debating Silver.

    I think this is an excellent picture for those that don’t use charts as their guides for many reasons. It points out how those who invest based on the chart can and often do change their positions. Looking back at early 2012 one can see Mr Market showed where support (buyers came in) and where resistance (sellers came in) between $26.00++ and $35.00+ this is the channel traders make money inside, until the support broke down and created the next trading channel between $24 and $19…now we wait to see if Silver can regain a higher trading range which would be breaking above $26 or continue to trade within $24-$19…OR breakdown yet again below $18.00 and set up a lower trading channel est? $18.00-$15.00

    Peter has certainly be around charts long enough and I really appreciate those that trade to make a living vs hot air opinions….but that’s just me, lol

    Apr 22, 2014 22:34 PM

    April 30th the next Fed day FOMC….hmm just wonder if their action/wording might just create the Sell in May and Go Away trade…timing is bang on!

    Apr 22, 2014 22:35 PM

    If we buy into the notion silver is a little brother to gold, and, gold seems headed to a seasonal low … seems both silver and gold should give us buying opportunities in the weeks ahead. Good news for investors holding for the long term. For what it’s worth: I like to rely on basic dollar cost average/portfolio allocation investment strategy – but – on the day(s) I buy metal (or stocks) the timing method is all about the charts.

    Apr 22, 2014 22:28 PM

    The problem with his opinions based solely upon charts is they are based upon a fraudulent Comex pricing mechanism.
    This is not a free market so these technicians are just perpetuating the fraud.

    Apr 23, 2014 23:56 AM

    Thanks Cory… interesting.

    Free Market or not, there’s something to it and I appreciate any guidance a qualified technician wants to put in front of me for my consideration…

    http://www.growthstockwire.com/3731/trading-alert-our-silver-indicator-is-flashing-buy-

    I posted this article from Jeff Clark over the weekend. He says “Every trade using these signals over the past year has been profitable.” Is he going to be right using his “flashing buy” call this time around? I think there’s a high probability very short-term. I mean looking at the signals, a move of 50 cents up is enough to be “right” within this context.

    Guess what I’m sayin’ is these guys (the ones with creds) put their analysis out there for all the world to see and for the most part, they can back it up with an intelligent argument. People love ’em when they’re right and piss on ’em when they’re wrong.

    Apr 23, 2014 23:55 AM

    All this is just an illustration of one part of a larger bear market in precious metals in general and silver in particular. I my opinion what is normally perceived as a bull market is just the bear taking a break between meals. It is still a situation where a minority of the public in the west are interested in gold and silver. There is still evidence of voluntary and induced selling by the public.

    Apr 23, 2014 23:32 AM

    North American population is 530 million(includes Cuba and

    Apr 23, 2014 23:34 AM

    Sorry-includes Guatemala,Cuba and Mexico in that 530 million.
    Asia has 4.3 billion.
    Any induced selling of gold and silver is Comex related and has no bearing on pm reality for the majority of the planet.

    Apr 23, 2014 23:46 AM

    If these charts are “painted” then they are of value. IMHO we have to know when they step out to buy more paint at the Home Depot to catch these little rallies in between.

    Apr 23, 2014 23:09 AM

    I watch inverse ETFs and a Canadian gold one just dropped 5%