Silver’s Set To Get Slammed
Abigail Doolittle | Apr 16, 2012 02:32AM ET
There’s the awkward, for me, possibility that silver avoids getting slammed by what appears to be a Diamond Bottom, but it seems that this pattern of consolidation may, in fact, be a pause prior to a continuation of silver’s near- and intermediate-term downtrend.
Good reason to think this could be the case is shown by a stellar Pipe Top that forms the apex of a nice looking, confirmed and bearish Rising Wedge along with a still-fulfilling Bear Pennant not to mention the fact that the Diamond Bottom’s apex appears to be trading in a Pipe Top of its own. For those of you who like the details, the targets on the first three patterns are $30, $27.50 and $26 per ounce respectively, with confirmation holding for all three below about $34 per ounce while the small Pipe Top confirms on Friday’s close at $31.33 for a target of $30.10 per ounce.
Relative to the Diamond Bottom, its more proper upside scenario confirms at $33.28 for a target of $35.57 per ounce while its downside scenario that may be somehow inappropriate but carries the support of those many other aspects confirms at $30.99 for a target of $28.70 per ounce.
Supporting the Diamond Bottom breaking to the downside, in addition to those many aspects, is the Descending Trend Channel shown above, in part, and something that represents silver’s intermediate-term downtrend that must be presumed to remain in effect unless silver begins to reverse it by rising above, interestingly, the target of that Diamond Bottom at about $35.57 per ounce.
Perhaps this gives the silver bulls some reason to think that one of the worst looking, if not invalid, Inverse Head and Shoulders patterns out there has a chance, but the next note on silver, if it is still relevant, will address why that pattern is so bad and actually a typically bearish pattern in disguise.
Right now in this note, it seems fair to stay off the fence and say that silver’s set to get slammed.
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