Silver Charting and Silver TA Chat

Azure

Azure

Well-Known Member
Silver Stacker
I'm sure many people have differing opinions on the effectiveness of analyzing charts and chart patterns, as well as trying to measure sentiment when it seem worldwide finance markets and political policies affect the market so dramatically.
However, many people use do various methods of analyzing charts both long and short term to draw their lines in the sand and I think it would be good if there was a place for discussion about this on SS, especially in reference to the metals.

To start I have compiled a huge long term daily silver chart for some eye candy and your reference.

My initial comment/question is in regard to the current trend-line and trading patterns that seems to go back to late October 2008, silvers last major bottom.
This trend follows from this bottom to the point of a breakout ( late august 2010 ), and then reverts to that trend-line.

Also I've found that if you go all the way back to September 2005, and draw a line from the breakout there to the breakout above ( late august 2010 ) then you end up with a current price of about $22.50.
Would anyone consider this point to be a strong resistance barrier based on this long term correlation for being an 'event' point?

Finally their is a nice one hitting all the peaks from the high of April 2004 to the 'then' high of Jan 2011.

Charts, Stats or links to technical commentaries are encouraged.
Comments, and opinions are also welcome.

Chart uploaded in the post below so I can keep it updated.
 
UPDATED: 10-04-2021 +NOTE: You will need to click on it to zoom in. (30000px x 5000px daily 20c bars since 1980 : 250kb)
 

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Azure said:
This trend follows from this bottom to the point of a breakout ( late august 2010 ), and then reverts to that trend-line.
Click to expand...

Yep, I see it. There is also strong support at around $26. If $26 is broken, price is in trouble - next stop around $20, with strong support at around $18.
If I were JP Morgs, I'd be preparing an arsenal to smackdown through $26 and watch the waterfall effect of covering do the rest. Needless to say, I will be joining them with a short position to hedge my stack. :)

4088_chart1a.jpg



Azure said:
Also I've found that if you go all the way back to September 2005, and draw a line from the breakout there to the breakout above ( late august 2010 ) then you end up with a current price of about $22.50.
Would anyone consider this point to be a strong resistance barrier based on this long term correlation for being an 'event' point?
Click to expand...

I don't see this ^^.

Azure said:
Finally their is a nice one hitting all the peaks from the high of April 2004 to the 'then' high of Jan 2011.

Charts, Stats or links to technical commentaries are encouraged.
Comments, and opinions are also welcome.?
Click to expand...

Yes I see it. I have posted this one before. It shows price has been in a downtrend since the 2011 peak. Currently in a flag pattern which is bullish long-term, but in the short term shows price is headed for the low $20's. If price breaks above $30-31 soon, it could be out of the woods.

4088_chart1b.jpg


Neither of these patterns bode well for the silver price ATM, but it is just my interpretation.
 
In a word Azure. Absolutely. Event point is hard support. If that breaks it's $20 ish and frankly should be dream stuff for most of us waiting patiently to buy:)
 
87_longterm-trends.gif

These are the long term lines I was referring to:
1: Blue: Previous peaks in 2004, 2006, 2008 & Jan 2011 ( Ignoring the parabolic blow off of April 2011 )
2: Green: Beginning of upward move leading into the 2006, 2008 and 2011 peaks, also notice the resistance after 2008, and before and after breaking through in the beginning September 2009.
3: Purple: As you noted above, was a good floor, and definitely a key area.
4: Yellow: The horizontal $26 line that has show to be a bottom 4 times now.

I see what you mean with your pendant ( And that does looks quite ominous ), but if you draw it out with the floor at 26 rather than the bottom line you have there, it looks very close to converging.
Probably only a few of months, if that.
 
Azure said:
I see what you mean with your pendant ( And that does looks quite ominous ), but if you draw it out with the floor at 26 rather than the bottom line you have there, it looks very close to converging.
Probably only a few of months, if that.
Click to expand...

True, but in my experience, the closer a pennant converges to it's apex, the less reliable the pattern becomes.
The pennant with a $26 floor is now filled to the apex, so I will only be regarding the $26 horizontal support line.
the bullish flag is clear and looking good, but still looks like a break down towards $20 before this bullish pattern is realised. (IMO)
 
upandaway said:
In a word Azure. Absolutely. Event point is hard support. If that breaks it's $20 ish and frankly should be dream stuff for most of us waiting patiently to buy:)
Click to expand...
I also have dry powder aside for such a scenario ;), but having said that, I'm not really looking for a bottom so much as some points of support that might be possible higher bottoms than $20, or somewhere to head after a bottom is reached.
The future is filled with uncertainty.

wrcmad said:
True, but in my experience, the closer a pennant converges to it's apex, the less reliable the pattern becomes.
Click to expand...
???
Do you mean less likely to hold (within the pattern), or less likely to result in the predicted signal (bullish break, or bearish break), both, or something else?
Your comment make perfect sense in English, but not in my head.... :lol:

Also is this a commonly believed 'rule of thumb' or something you have personally picked up from experience?
I'm fairly new to analysis and simply curious.

Cheers.
 
Azure said:
???
Do you mean less likely to hold (within the pattern), or less likely to result in the predicted signal (bullish break, or bearish break), both, or something else?
Your comment make perfect sense in English, but not in my head.... :lol:

Also is this a commonly believed 'rule of thumb' or something you have personally picked up from experience?
Click to expand...

This is from my experience. I have seen this pattern degenerate to nothing a number of times.

The pattern seen below is a descending triangle - most commonly found in a downtrend as a continuation pattern, but also found in an uptrend as a reversal pattern. Either way, it is bearish.
The expectation is that price will break downwards from this triangle by an amount equal to the price range at the base (marked "A").
The most reliable breakouts occur between half and 3/4 of the way to the apex - I have marked these expected break out points with red arrows.
Triangles that work their way right to the apex often degenerate into a different, larger pattern.
So, 2 reasons why I am disregarding this triangle:

1. Price has consolidated all the way to the apex.
2. Price target for a downward break as measured from the base would be around $3.50 (unrealistic??). However, target for an upward break would be around $44.00.

BUT, the support level at $26 cannot be disregarded. And, I believe the pattern this triangle has degenerated into is the above picture bullish flag - however, it would seem a strong possibility we will see lower prices before a bullish break out occurs - around $18-$22 at the bottom of this flag. A saving grace would be a sudden break above around $31, or the 200 day MA.

4088_chart3.jpg
 
Thanks for that explanation, I see where your coming from now.

I've zoomed in here on the beginning of the 2010 - 2011 Rally.

87_2011-support.gif


25 and 23 seem to be the last definite points on the graph that standout to me as being good for horizontal markers for support on the way down...
other than that, the run-up there looks pretty smooth.
 
Azure said:
25 and 23 seem to be the last definite points on the graph that standout to me as being good for horizontal markers for support on the way down...
other than that, the run-up there looks pretty smooth.
Click to expand...

23 and 25 (in my view) are not very strong support, but may cause a price fall to pause on the way down.

As shown in below pic, 18 -22 is very strong support, as it was a very well tested resistance, and this level also corresponds to a move below the $26 support down to the bottom of the bullish flag pattern (blue arrow).

If price moves down to the low 20's level, this will be an inflection point.

4088_chartaaa.jpg
 
Mmmmm...... price is poised at a significant level this morning. Which way will it go?

Get ready...... get set.......... but remember - do not false start. ;)
 
IMHO, wrcmad is entirely correct in his/her analysis, some really useful points made for those unfamiliar to TA.
 
Azure,

Good topic. I really like reading wrcmad's TA, and must confess to being fortunate enough to actually be learning (when time permits) from professional traders. There are very few commonly workable tools IMO and far too much is made of lagging indicators. Most of their stuff is from things they have discovered themselves over many years and not written in 'on the shelf' books. As wrcmad said it is from what he has seen that he comes to the conclusions he does. It's not the same approach as I am following but if it works that's what counts. Trend lines however are very important.

In regard silver it's 4 in 4 calls over a number of months. Longer I stick at it the less and less I listen to manipulation noise and frankly plain wrong TA hocus pocus which appears endless. Most of it is there to swallow the retail investors bank balance and entice them into the market.

I will stick with a break of $26 later year but still have some trust issues with this. I know the reasons why we should see it fall lower but you are always a tad apprehensive when waiting for a large buy and knowing silver's tendency for volatility with the financial world the way it is thrown in. No one is ever 100% I just hope and prey they're right on this one!! :D
 
everyone else is having a go :) looks to me like the start of another shoulder so up to 32ish then back down to where ?
 
I've just updated the big long term silver chart again, for those that are interested.
Click here, or on the image in post #2 to be directed to the full image.

Note: This is an external link to the full chart, you will need to click on it to zoom in.
(It's only 192 kb, but too "big" for the thumbnail generator, so is hosted elsewhere.)
 
Thanks Azure, very kind of you to share this

p.s. I'm just about to head out to the shed to grab a couple of 19" monitors to hang off the sides of the 24" - times like this you cannot beat screen real estate! :P
 
No probs :)

I was thinking of printing it out... But It would take 10 A4 pages side by side ( Vertically ) to fit it. :D
 
I wouldn't be surprised at a sharp move very soon.

Bollinger Bands have squeezed the tightest they have been since Aug 2010, which preceded the move from mid-18's to around $31.

Doesn't indicate a prolonged move like 2010, nor a direction, but could be in for a jolt either way very shortly. (You know my suspicions about which direction. :))
 
So to sum in simple sentences:

Hold your breath If breaks below the $26 'cos the next strong support $18-$22 and have tears of joy if it breaks above $31.....
 
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