Silver’s Technical Tricks

Quite often currencies and commodities trade more strictly to technical patterns than individual stocks and indexes. The recent moves in Silver, shown in the Silver ETF, $SLV, below, are no exception. Since breaking higher in mid August, Silver has been cycling through two harmonic patterns. First, a bullish Gartley completed in January with a reversal higher that came within 1 penny of Initial Price Objective (IPO) of 31.42, a 61.8% retracement of the range of the Gartley. But it turns out that this move higher was just the first leg of a bullish Crab, should it continue lower

slv

(and it is in pre-market trading). The Potential Reversal Zone (PRZ) of the Crab starts at 27.37 and runs lower to 26.88. A break back up through that and then reversal higher carries an IPO of 29.68, or 61.8% of the Crab range. What if it does not continue lower? Well that is okay too. The pattern up until Tuesday could also be a second bullish Gartley that has already moved through the PRZ at 29.21. In this case a reversal, triggered by a move back over 29.21, would target 30.34.

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Dragonfly Capital Views Performance Through February 2013 Expiry

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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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