a deadly sign for silver, page-10

From Peter Brandt, one of my favourite TA guys

http://peterlbrandt.com/silver-is-set-up-for-a-major-league-hammering/


Silver is set up for a major league hammering

Posted by PeterLBrandt on November 14th, 2011


Confluence of a major down trend, a 7-week rising wedge and a 3-week symmetrical triangle could take the shine off Silver ($SLV, $SI_F).

The Silver chart is turning into a potential perfect storm. Since Sept. 26 the Silver market has been struggling to correct the decline that took place during a brief two-day period (Sept. 23 through early in the session on Sept. 26).

The entire rally has taken the form of a rising wedge, normally a bearish chart pattern. Note how the upper and lower boundaries are converging. This is a sign the market is reaching a point of termination. A symmetrical triangle has been forming since Oct. 28.

A decisive close below the Nov. 10 low of 3313 would complete the triangle and the wedge. The first target would be the September low. However, if one takes this wedge to be a half-mast pattern, then the decline from the Oct. 28 high should equal the decline from the Sept. 2 high to the Sept. 26 low. This decline was $17.35. Thus, a further target of $18.35 can be established.

Remember, a decisive close below the Nov. 10 low is required to trigger this sell signal. But also remember that classical charting is not a perfect science. The market could breakout to the downside and fail. The present wedge pattern could morph into any variety of larger patterns. All we have, as chartists, is trigger points that carry a certain reward to risk profile. Trading is about reward and risk and possibilities and probabilities, not about certainties and certainly not about being bullish or bearish.