Friday’s punitive reversal breached p=61.910 decisively, so the yellow flag is out. A tradable implication is that a rally now to the green line (x=63.497) would trigger a ‘mechanical’ short. The pattern could also prove useful for bottom-fishing the decline using the lesser charts to set up ‘camo’ triggers at p2=60.322 and d=58.735. We should also be alert to a possible breach of d. Although I don’t expect it, that would signal a potentially bigger correction than the $6.35 selloff I warned about in the trading room. ______ UPDATE (Dec 17, 10:04 a.m.): Silver has uncorked yet another powerful rally — as usual, without having fully corrected to a minor ‘d’ target. In this case, d=58.735, but the futures went no lower than 61.105. The upward reversal also made short work of the ‘mechanical’ short suggested above after failing by 20 cents to fall to a midpoint Hidden Pivot at 61.910 where the short could have been covered, at least partially,’by the book’. The cautionary numbers noted above still obtain, meaning that a $6.35 correction is still overdue, and that a $1.58 drop would signal its onset. In any case, using a smaller, conventional pattern yields minimum upside over the near term to at least 69.250 (daily chart, A=56.850 on 12/4). A pullback first to x=63.074 off the current so-far high (66.650) would trigger a very opportune, ‘mechanical’ buy.
SIH26 – March Silver (Last:66.105)
