Silver - Climbing the Firewall of Worry
by Rodin
December 1/04
Here is a precision ribbon chart for silver. Ribbon charts are a ‘;-{> thang, drawn onto the log scale. My definition of a ribbon channel would be that it’s height on a log scale is a constant, k.
Note how S/R/M all turn at exactly the same time at the end of April.
Not to mention everywhere else.
I have been watching up-trend support
since September. It has held, save for a single ‘Wyck’ 1
week in November (2nd red arrow). It is clear that silver is being offered a chance to break out to the upside into a waiting channel, whose S/R/M and even higher harmonic lines match those of the broad channel. If silver accepts this offer, bear in mind she has ‘Wycked’ already. The bowstring is taut…
The Bear Case
Stacked against an upside move are several factors, most of which are ‘out there’ – PM share non-confirmation, Divergences, Gold having gone French, the large COT commercial short position, the Bolser Bop call. The expectation is a fall from here.
To be honest, I would almost call all of the above bullish, in a double-contrarian way. (My star sign is Contrarius, with Contrarius in the ascendant).
But there’s more....
Some deep PnF undertaken by a fellow chartaholic points to further PM share downside. I can’t argue with this person’s recent trading record, therefore I heed the warnings. (This may not, I have been informed, necessarily apply to the metals.) I too have found some dark lines of worry in the log charts of the PM indices. Infuriatingly, downside targets derived from these diverse analyses seem to have a habit of co-inciding.
Then there is this chart...
But there's more
Gold Eagle Forum viewers and visitors to my website may have seen references to mysterious 'G-R' lines. These are proving to be pretty strong S/R. Right now G-R is combining with the post–September up-trend (chart 1) to provide strong support to silver. Which is why, despite the almost overwhelming weight of evidence to the contrary, on balance I believe silver is about to break higher.
And if it misses out on the first channel, there is a fall-back channel safety-net - a Plan B power up-trend channel waiting in the wings - also with G-R support. Plus an inverse H'n'S just itching to break out...
I believe silver is going to move big, and soon. Whichever way it goes, I’m not going to argue with the Lady.
On my black pages there is a statement – words to the effect we can’t go up unless there is sufficient doubt.
How do you feel?
rodin - 1st Nov 2004 when he should've been doing his VAT returns
Rodin