No Mercy, 15, 13, 11 and 7

Who tells us the worth of a silver ounce?

Who determines the true worth? Do the gold- and silver bugs do, the protagonists, the industry, the manufacturers, the fabulists or we analysts adducing the charts and fundamental dates and dreaming of/reckoning with/expecting 50$/oz. or 100$/oz.?

May it be the market that in general settles the silver price, constantly pricing in the future developments and always brutally defining what the silver price is and where the true worth of this precious metal is situated. Commonly, the market doesn’t give a hang about the bugs’ fortunes and expectations.

Since 1981, hence for 33 years, as few as 10 times at the end of a year silver was more expensive than 10$/oz.

It happened in 1982, 2006, 2007, 2008, 2009, 2010, 2011, 2012, 2013, and in 2014 silver is going to close above 10$/oz. as well.

I’m 50 years of age now, and during the 33 years since I grew up only just for 10 years the silver ounce higher-priced than 10$/oz. The majority of my grown-up time, the silver ounce traded not even at 10$. Most yearly closings of the last 33 years were even at 4, 5, 6 – rarely about 7$/oz.

Now I just venture to say that the historic internal value of 1 silver ounce is just about the price of a normal McDonald’s menu. I’m allowed to say so for properly saying I haven’t experienced anything else… during most time of my grown-up life. A silver ounce isn’t worth more than a coke, French fried, ketchup and a double cheeseburger. This is the way the market has seen it for decades. Considering things like this, a silver ounce is only a little bit more worth than a handful of gunk… of this kind of gunk. I’ve seen price above 30$, 40$, and I even experienced 50$. Those were dreams however, wishes come true in a short term, as it seems.

Why should respectively might silver become one-digit soon again? Because the market wants it like this, I think to myself. It prices in things we cannot respectively don’t want to even imagine and envision. Possible now is the way from 50$/oz. in 2011 down to 7$/oz. in 2015, within just 4 years. I don’t say it will happen like this. But it is within the realms of possibility because some critical GUNNER24 Landmarks are reached now. If these ones fall, silver, and also gold, other metals and many more commodities will switch into a panic sell-off mode entirely.

Starting point for this current deflationary horror-scenario is the now clearly falling oil price. It is intentionally driven respectively manipulated downwards even though it just may tend to its normal average price of the last decades.

The USA and the allied oil producing countries want respectively have to make the oil price fall in order to “wipe out” Russia quickly.

For the US, Russia’s Putin is Enemy of the State # 1 again. They just need an enemy of the state. After Bin Laden and Snowden, Iraq, North Korea etc., now it’s Putin’s turn. Lower commodity prices are to hit Putin and Russia directly because thereby Russia’s gross domestic product decreases, and as a result incomes drop. Falling Ruble, notified national bankruptcy, revolution etc. is the plan of the American leadership ranks:

The price of Crude Oil (WTI) has reached an enormously important support now. If this one is fallen short, 60$ will be the minimum target. This most important of all the supports in the big commodity universe is matter of the 1*1 Support Angle that starts at the 2008 all-time high.

If it falls to the monthly closing base in November or December 2014, the upper line of the 2nd double arc MUST be headed for at the 60$ region in the down setup above.

The seasonality is signaling and notifying that the 1*1 Support Angle will fall on monthly closing base till December 2014 and that the whispered/rumored 60$ for crude oil spooking in the chartists’ and analysts’ circles might really come true – in fact rapidly, until summer of 2015 at the latest. November and December are traditionally very weak months for oil, and if the present weakness continues through the year-end 2014, the 1*1 Support Angle will be most likely to be broken.

After the break of the first double arc support in September 2014, working off the upper line of the 2nd double arc is activated downtarget anyway. At the green oval, oil spiked up with the year-low 2009. After re-conquering the first double arc in succession testing it successfully over many years = blue ovals, the 1st double arc support broke finally in September 2014 thus confirming a long-lasting down move that was to work off the upper line of the 2nd.

The first question that remains to be asked now is the further course of this downtrend. There are only 3 variants: 1) the 1*1 Support Angle breaks till year-end 2014, preferentially as early as in November, crude oil will follow the dotted red arrow downwards to the 60$ until summer 2015. This variant is the most probable one. It’s Lombard Street to a China orange.

Or 2. The 1*1 Angle holds now in November and until December being able to produce a bounce up to 2a) 85$ respectively even 2b) 90$ (first square line resistance). The very first test of the 1*1 Angle is currently taking place. Technically, the 1*1 Angle is supposed to hold always permitting/forcing a thoroughly strong rebound. Successively, after reaching the corresponding high, oil would be supposed to go downwards above the 1*1 Angle in a relatively gentle way until it reaches the upper line of the 2nd at 66$. ==> Both black trails sketched in the chart clarify more or less these variants. As you see, the 1*1 Angle would hold during the whole downtrend.

Now we simply proceed logically asking the simple question: If crude oil quotes at 60$ till spring 2015, where will silver be then that is now trading below 16$/oz?

The 60$ at the upper line of the 2nd is actually the target for crude oil now. What will happen however if the upper line of the 2nd double arc does not hold? If USA and the allied oil producers want to pass the price down to 45$ because only in case of such prices Russia will go to the national bankruptcy…? Historically, considered over the last decades, 45$ is still a thoroughly high market price. So, where should, where might silver quote in summer 2015 in that case?

As notified here as early as last September, the 15.25 are reached and worked off now. The important down magnet formed by the lower line of the 2nd with the 2008 Support Angle was an overly compelling and too strong point of attraction for silver.

Since the magnet respectively the minimum target is reached, the metal is allowed to bounce upwards now. Technically, we can work on that assumption. Now the metal may bounce up for several weeks, maximally 6. First uptarget is the 16.95 horizontal, now a strong and important monthly resistance. After working off the 16.95, maybe the 18.60, silver will be supposed to resume its downtrend successively breaking first through the 15 and then reaching the 13.10 rapidly.

On the other hand, any future weekly close below 15$ will activate immediately the next lower downtarget, the 13.10 horizontal support. Thus, at the earliest by the end of next week, the 13.10 can be activated with a closing price of less than 15$. The 13.10 are and keep being main target for this silver downtrend. From there, technically a several year uptrend is supposed to start. When gold reaches its 950$-1000$ target region, silver should technically be at the mentioned 13.10.

==> I think however that in 2014 with any clear weekly close below the 15$ mark, hence from about 14.85, also a panic sell-off move may begin that just theoretically renders possible a silver downtarget of 7$/oz. It’s something that we can respectively want to believe very hardly, but the 7$/oz is actually equivalent with the normal silver price of the last 33 years…

Like crude oil, also silver has got an important Gann Angle Support that presently clarifies the make-or-break-situation of the entire market. In the case of silver it is the matter of an angle in the weekly time frame that implies an important centrality at the moment. It derives from the 2011 all-time high:

Within the downtrend the angle was seriously tested 4 times altogether. Please mind the red ovals. In summer 2014, it was taken upwards in the 5th approach, being exactly reached again with the current 15.04 downtrend low. After the first back-test of the Support Angle happened, now we can really expect that silver for the time being will show a counter reaction upwards that is likely to last several weeks.

The first vector in the down setup above is traced from the all-time high to the low of June 2012. The Blue Arc = orange squares as well as the lower line of the first = purple squares influenced the price leading to a several week counter-reaction. Since all the arcs in a GUNNER24 Setup have a mathematic correlation being likewise reached the upper line of the 2nd with the lows of last week, the upper line of the 2nd should hold as well – at least for a couple of weeks – being able to force the market upwards. Thereby, the lows of last week worked off some important support magnets in the weekly as well as in the monthly time-frame. So a several week counter reaction is to be reckoned with now ==> possible uptarget is the 16.95 (perhaps the 18.60, see next chart), see monthly down setup.

The current downtrend is strong however, sustainable and merciless. As suggested above, with a clear weekly close below the 15$ mark, hence from 14.85, a panic sell-off mode might begin making possible a silver downtarget of 7$/oz, just theoretically.

If still in 2014 one week closes below 14.85, the following red-arrow scenario will be possible. As a reminder: A weekly, but also a monthly close below 15 will activate the 13.10. This target is put out by the monthly chart. The 13.10 are below the important weekly Support Angle:

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