Till last Tuesday, silver was just chafing at the bit trading once more at the 17.55 day low. Next, the switch was being flipped by someone or something, so silver started to join the post Brexit precious-metal party.
Then, the Silver Miners opened the throttle again extremely hard last Wednesday. Thus, each important element in the gold-and-silver sector is in the confirmed breakout mode: gold, silver and the Gold and Silver Mining stocks; the seniors, the juniors and the explorers.
I’ve always felt that silver is one of the hardest tradable markets. By means of its extreme market narrowness the futures traders get troubled easily. Some heftily quick and often overshooting reactions are sometimes the results.
Those support/resistances that in calm seas would certainly be important are being actually mangled when silver comes into play thereby releasing further trend energy. Higher resp. lower targets in the trend are therefore being worked off well-nigh stunningly fast. Turning and stopping magnets that previously weren’t really on-screen crystallize out as new then because of budding exhaustion.
Yet not only trend comportment in pronounced silver trends is pretty strange sometimes compared to other broader and conservative markets. Also consolidations and corrections in silver often take courses different from "normal" ones. Whenever silver swallows a couple of ecstasy pills, sometimes the "price-time continuum" is simply being turned completely upside down.
In regard to duration and uptargets, I’d assess the current silver breakout move as follows…:
Let’s first go into the silver progresses of the last trading week with reference to the monthly time frame. In the following picture, to the right you see the monthly silver chart related to a valid silver GUNNER24 Up Setup. It was first presented and briefly analyzed in the last Sunday issue of the free GUNNER24 Forecasts:
==> Until last Tuesday close at 17.843, silver remained below its dominating first square line resistance in the monthly time frame. On Wednesday, for the first time the silver future closed clearly above this 18.08 first square line resistance (Wednesday close at 18.407). Certainly, the foretold breakout into the forecasted next higher monthly GUNNER24 Uptarget was therewith finally sealed.
With the Wednesday course, silver confirmed that the lower line of the 1st double arc magnet = monthly uptarget would have to be reached at 19.80 in the current uptrend.
This happened quite promptly. As soon as Friday, silver reached the lower line of the 1st double arc resistance. So, within just 3 trading days, silver cracked first through the 18$ mark, then through the 19$ hurdle reaching a day high at 19.98 on Friday thus scraping pert near at the 20$-Gann Number Magnet.
As to my judgement, the vehemence and rigor this post-Brexit rally turned out with can only be explained by the troubled Commercials that had been and keep on being positioned massively silver short. Certainly, in a panic way the Big Boys had to exit shorts partly looking for a new position in the long direction.
==> Of this imbalance, the Commercials won’t be able to get rid simply and quickly. I think silver will – will have to!!! – head for the 22.50 fivefold GUNNER24 Upmagnet till end of August/beginning of September!
Update and new analysis of the silver 6 Candle monthly up:
The silver future ended June above the 18.08 first square line. Thereby, reaching the lower line of the 1st double arc as the new monthly uptarget was final activated.
It’s too tough...: this next higher monthly uptaget - the lower line of the 1st is at 19.80 – was attained and worked off during one only trading day, last Friday, the very first trading day of July. At the Friday high, silver reached 19.98 closing the week at 19.72.
Regarding the new July candle we realize that silver:
A) Is showing a little reaction – at least in the short term – to the lower line of the 1st double arc thus somehow confirming indirectly its importance for the market as well as its resistance state.
B) The metal didn’t succeed in closing above the lower line of the 1st double arc. Neither on daily, nor on weekly base!
==> The fact that the lower line of the 1st was already worked off after the first trading day of the new month, demonstrates in my opinion the presently existing imbalance of the Commercials indicating that the "price-time-continuum" is currently levered out completely.
==> I think, therefore the Commercials will have to cover their short-positions massively likewise during the coming weeks, and that will lead to a further ascent of the silver price.
Silver has broken out from an inverse Head and Shoulders pattern currently being close to a 2 year high. Last week, silver succeeded in closing clearly above the important year 2015 countertrend highs (18.505) thus ultimately confirming its situation in a new bull market (for at least 13 months).
==> The inverse Head and Shoulders pattern projects a target above 22$!!
The breakout move is only just at the beginning considering the time factor.
==> By means of all these bullish factors, silver is supposed to at least head for the lower line of the 2nd double arc at 22.40-22.50. At 22.50, there is a Major GUNNER24 Horizontal Resistance in the monthly time frame
GUNNER24 Signaling, resp. where and how enter into the trend?
The monthly time frame is rather clean and clear regarding its GUNNER24 Signaling.
A breakout is a breakout, and we don’t know at which price level this silver breakout shall be willing to exhaust in the short term. If the breakout move wants to keep on performing the way it did during the last 3-4 trading days, the lower line of the 2nd at 22.50 will possibly be reached and worked off within the next week already – the likelihood to happen like this is extremely bare of course!!!
==> Correspondingly, a possible breakout continuation will have to be traded like this:
==> A first daily close above 19.85 = lower line of the 1st double arc will activate the upper line of the 1st double arc resistance to be reached at 22.25 for the breakout!
==> A weekly close above 20.40 will activate the lower line of the 2nd double arc within 4 trading weeks!
==> Please go massive, silver long if the 18.63 is reached once more in July. That’s where the gap is, ripped between June close and July open. This gap can only be matter of a monthly breakaway gap. It’s thoroughly possible. This is what I think: If silver overcomes the 20.30 hurdle without closing the 18.63 gap before, at first the 22.50 shall have to be reached and worked off before the 18.63 gap should be closed some day in the far future.
==> Is there a chance that the 18.63 gap will be closed before the rally into the 22.50 target is continued? Yea, it is!! Anyway, Friday showed some reaction to the lower line of the 1st. The lower line of the 1st resistance at 19.80 might ring in a somehow heftier bounce leading to a swift gap close. Silver doesn’t like gaps at all and much less if those are visible and appearing in the monthly time frame. So be prepared for a bounce punctually starting next Tuesday in order to close the 18.63 gap.
May the 18.10-18.00 Major Support Area be reached once more before it comes to the 22.50 to be worked off finally? In theory, it may. The probability is minimal however, below a 3%.
Let’s go now into the mélange and the signaling of the weekly time frame up setup:
In the weekly time frame, an 8 Candle up setup has formed starting at the final low 2016!! Hence, the January low.
I’d like to go now into the very most important items this setup bespeaks us.
Just have a look at the silver bull market’s performance at the red arrows. That’s where it began turning. Triggered by the anchored Resistance Angle, at this angle two several week correction phases started.
==> I think now, without this Resistance Angle being touched once more, no correction and no consolidation phase at all will be able to start! With rather certainty, silver will have to head for/work off the Resistance Angle before the current breakout move will even be allowed to come to an end…
May this happen next week? Yea, it may. The Resistance Angle intersects the upper line of the 3rd double arc exactly at 20.50!! Thereby, next trading week a final breakout high at 20.50 might be shaped. Then, as a result of this technically strong weekly resistance magnet, starting from the 20.50 silver might begin to correct its current breakout move…
It’s curious that silver has NOT yet reached the lower line of the 2nd double arc (at 20.05 for next week) even though this arc is activated weekly uptarget now. This is what the metal should achieve by all means in the current Howly-Cow-rise! Very probably till next Tuesday!!
Because…/rationale for this…: At both little orange rectangles, the metal considered the lower + upper line of the 2nd double arc at two week highs. Furthermore, the trading week before last closed narrowly below the lower line of the 2nd, and last week opened scarcely above the lower line of the 2nd. And this is always clear: If a double arc had certain significant in the past being considered by the price that strictly, the next double arc in trend direction should have to be able to get the same importance for the market.
==> So we’ll have to be prepared for silver to begin correct the current breakout after the 20.05 being worked off, but maybe not topping out before 20.50 in the course of next trading week.
Remember?! The monthly up setup suggests that the 22.50 uptarget will have to be reached in this uptrend. The 8 Candle weekly up setup above shows massive resistance between the 20.00 and the 20.50 in the weekly time frame. 20$ is "round" Gann Number Resistance. 20$ is also a psychologically important resistance threshold.
I think that by all means a weekly close above 20.40 is a harsh indication for the 20.00-20.50 resistance zone to be overcome upwards finally.
If silver falls back strongly for the time being after the 20.05 resp. 20.50 being worked off, the very first buying zone for a weekly position will be between 19.20 and 19.00: At 19.20 there is the center support of the just passed square. 19$ is round and another important psychological mark for silver and of course not tested back actually.
Best cause safest entry into a weekly long position would be a classical backtest of the 2nd double arc support environment at 18.30-18.20 within the next 9-10 trading days!
==> A weekly close above 20.40 will activate the next higher uptarget of this bull! It’s matter of the lower line of the 4th double arc.
A much more conspicuous upmagnet for the current uptrend seems clearly to be the 22.50!!
A) In the monthly up setup above, we could identify an important GUNNER24 Horizontal = Major Resistance at exactly 22.50.
B) In the weekly setup, at 22.50 for the 34th! week of the current uptrend we recognize the following: Then, a GUNNER24 Horizontal intersects the upper line of the 4th double arc. In addition, THE DETERMINING RESISTANCE of this bull in the weekly time frame – the Resistance Angle – TOGETHER with the next reachable important time line meets the 22.50 in the 34th uptrend week. Thus, the 22.50 is matter of a combined fivefold upmagnet. A fivefold magnet is extremely seldom thereby being a most attractive upmagnet for the current bull market.
==> Silver could work off its 22.50 fivefold upmagnet during the week from 08/29 to 09/02 2016.
Be prepared!
Eduard Altmann