Silver Locked In 8-Month Trading Range
Peter Brandt | Jun 18, 2015 08:38AM ET
Silver is locked into an 8-month trading range. This trading range, like all trading ranges, is subject to morphology. Trading ranges can take on many classical chart forms during the course of development. What might appear as a possible bullish pattern one month can turn into a possibly bearish looking pattern the next month.
Critics of chart patterns use this evolutionary nature of a major chart construction as an indictment against classical charting principles. They display their naivety and lack of trading sophistication through their criticism. How a pattern forms is just as important as the form it takes.
One possible reading of silver at the present time is that a major symmetrical triangle is forming. Symmetrical triangles which reverse a previous trend require five contact points, three lows and two highs.
The intraday graph shows that the price action in June could represent a potential turn — leading to a challenge of the upper boundary of the symmetrical triangle.
A reversal triangle cannot be ruled out in silver. But as usual, a pattern is not a pattern until it is completed.
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