Wedge Breakdown, Imminent?
Like a stubborn mule, silver’s just not going along with the ‘hyperinflation’ narrative.
How many years of mainstream ‘breakout’ forecasts, has it been?
‘Silver upside breakout just around the corner’. ‘Silver to launch higher because of inflation’. ‘Silver physical shortage to expose futures manipulation’ … and on.
It’s not happening. Why?
Silver, more so than gold, is an industrial metal. In that sense, more like copper than gold.
That said, silver’s price action alone, tells us (along with copper) we’re in an imploding economy.
Before we get to the charts, let’s review what was said at the last update on silver (emphasis added):
“Since gold (GLD) is in position for an upward test of its wedge breakdown (chart not shown), it’s reasonable to expect another bounce off support for silver.
Using the ‘rule of alternation’, we already had a brief move off the first support level before reversing.
The next contact at lower support, will likely bounce for longer or not at all.“
Well, ‘bounce for longer’, is exactly what we got.
The prior bounce from low to high lasted 11-trading days (5/13/22 – 5/27/22). The current bounce lasted nearly twice as long; 20-trading days.
Silver (SLV), Weekly Close
Since the last update, price action bounced off support, confirmed the wedge, tested upside resistance and now, back down to the wedge boundary.
The zoom chart below shows the detail of the resistance test and reversal.
If SLV posts a decisive break below the wedge boundary, standard traditional charting technique provides a downside target in the vicinity of SLV 10.0, or slightly below.
As always, anything can happen. If silver decides to start posting bullish action, the analysis will be changed.
At this point, with growing fundamentals of economic collapse, i.e., Great Depression 2.0, silver’s price action is fighting the bulls (and winning), thus, confirming the economic decline (not advice not a recommendation).
Charts by StockCharts
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
The Danger Point®, trade mark: No. 6,505,279