The way sellers crushed p=22.92 on June 21 leaves little room for optimism that this correction will somehow avoid falling all the way down to the 21.21 target of the pattern shown. In fact, even a strong rally to the green line (x=23.77) would set up a ‘mechanical’ short that we should not pass up. The pattern meets all of our requirements for legitimacy but is perhaps a tad too obvious to produce a tradeable low at exactly 21.21. We’ll attempt to bottom-fish there nonetheless if and when the time comes, but with a ‘camouflage’ trigger that allows for some skirmishing ahead of the expected turn. We’ll also need to consider an alternative target at 20.98 that would result from treating the somewhat higher ‘A’ at 26.43 (May 5) as a one-off peak. _______ UPDATE (July 3, 5:55 p.m.): The equivalent downside target for the September contract is 21.44, and a rally to 23.98 would trip a mechanical’ short.
SIN23 – July Silver (Last:22.81)