The ‘Straight-Up’ Part
Has silver already gone parabolic, or is that part yet to come?
The Fibonacci projections are noted as blue lines.
It’s clear, price action’s respecting those levels.
Next level is near SLV 115 (not advice, not a recommendation).
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From: ‘Buy at Any Price, to ‘Volatility’
Seems like just yesterday, it was ‘buy at any price’.
Now, it’s ‘volatility’, link here and here.
Looking at the futures (SILH26), it appears to be the typical commodity blow-off (not advice, not a recommendation).
Of course, as always, anything can happen; somehow, somewhere (over the rainbow), silver could recover.
Hitting The Margin
Let’s not forget, margin increases, here and here.
For now, for the bulls, it doesn’t look good.
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Deflationary Pressures
This is not 1980, or 2011, says the report at this link. Website, link here.
The premise for ‘it’s different’, is the demand for ‘physical delivery’.
The chart in yesterday’s post, showed tracking fund SLV, very close to its Fibonacci 161.8% projection, near 76.30.
If we refer back to recent interviews with Ed Dowd, and to some extent, Bert Dohmen, they both talk about the current bubble(s).
However, Ed Dowd in particular, discusses the potential for a ‘deflation scare’.
That in turn, allows a provocative thought:
Maybe, deflationary pressures are so intense, the only way to get a blow-off mania spike (this time), is to demand delivery and stress the infrastructure (not advice, not a recommendation).
The futures market opens, in about 10-hours.
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The Danger Point®, trade mark: No. 6,505,279
A Look Back
It’s not a stretch to say, silver stackers, fiat failure futurists, the ‘bugs’, YouTube grifters, et al., are at the peak of euphoric hysteria.
Some, have even gone catatonic.
Well, it really could be different this time.
If that’s true, then, the chart below is of no significance (not advice, not recommendation).
Silver SLV, Monthly
If we take the entire move of the past 17-years and look at the prior high, we get a ‘Ruh-Roh‘, Scooby feeling.
Going back to historical data from macrotrends, it looks like the current price spike bears more resemblance to 1980, than 2011.
That assessment (the spike) would make sense if this market is ‘alternating’.
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The Danger Point®, trade mark: No. 6,505,279
Hovering, Just Above Resistance
Silver miners SIL, are at highs not seen in over a decade.
We already know, silver SLV, is at a Fibonacci projection and possible pivot, link here (not advice, not a recommendation).
It’s no stretch to say the media is screaming about silver ‘breaking its shackles’.
Oh, that’s just great.
If true, and with silver being such a thin market, then those ‘shackles’ may have kept the market organized, preventing massive, high volatility, low liquidity swings over the years.
I guess no one thought about that possibility. 🙂
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The Danger Point®, trade mark: No. 6,505,279
Does The ‘Correction’, Start Now?
More than a few ‘engineering’ types trading the market, will talk about getting over the need to know, ‘why’.
Why does Fibonacci work?
Why does price action alternate?
Why is the market moving, or not moving; why, why, why?
The media of course, wants everyone to focus on why.
If you’re focused on why, then you’re at least two steps removed from the truth.
Asking the wrong question (why) and then, looking for the wrong answer.
Both Livermore and Wyckoff, did not concern themselves with ‘why’ … but ‘what’?
With that said, let’s take a look at ‘what’s’ going on with silver, SLV.
Silver SLV, Daily Close
Shown, are the lows of August 2020 to last Friday’s close.
A whole week of updates (maybe more) could be spent on this one chart: there’s that much going on.
We have Wyckoff springs, up-thrusts, price action alternation, Fibonacci levels, time correlations, volume spikes, and the list goes on.
For today however, the main take-away is that Friday was outside-down (key reversal) on heavy volume.
That reversal (so far) took place at the exact 261.8%, Fibonacci projection (not advice, not a recommendation).
As said in yesterday’s update, we could also be in a new paradigm where silver just keeps on going.
Next upside Fibonacci projection (423.6%) is near 83.50.
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The Danger Point®, trade mark: No. 6,505,279
Standard-Type ‘Blow Off’
Do we have the usual parabolic ‘blow-off’ move in silver (SLV), or have we entered into a new dimension, where it’s different this time?
From a traditional analysis standpoint, at this juncture (mid-session) it’s not looking good for the bulls.
Silver, SLV, just posted out-side down (if it closes here, or lower) and it’s met a measured move target from a terminating wedge.
In addition, as we’ll see in the chart, the current trendline is rising at approximately 5,600%, annualized.
That type of move can’t be sustained; that is, if we’re not in a ‘new dimension’. (not advice, not a recommendation).
Silver SV, Daily
From a traditional standpoint, targets have been met; the day’s action (so far) is ‘key reversal’, outside down (not advice, not a recommendation).
As always, the trendline could hold.
SLV, could also go to the stratosphere in a new paradigm, where nothing makes sense anymore … oh wait 🙂
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The Danger Point®, trade mark: No. 6,505,279
Retrace Targets
We’ve just had an unprecedented launch to record levels, link here.
Eight trading days ago, price action pushed through levels not seen in two generations.
However, the next day, that all changed.
Looking at the front-month (December) futures contract SIZ25, price action itself, shows classic signs of a commodity blow-off top (not advice, not a recommendation).
Silver SLV, Daily
Price tends to go where there are transactions.
From the March lows in 2020, to the (potential) blow-off top, the majority of transactions took place in the 21 – 24, area (i.e., ‘Support Zone’).
Remember, there’s that $1-Trillion in margin debt, just waiting to be ‘called’ if not so already.
Silver could get to retrace levels quickly or not at all.
The market itself will let us know the most probable outcome.
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The Danger Point®, trade mark: No. 6,505,279
Peak Euphoria?
Looking at the graphic, where are we with silver?
Did we get to euphoria?
With silver bars being flown to the London Metal Exchange (here) and old-timers saying they’ve ‘never seen anything like it’, it’s possible, just possible, we’ve reached euphoria (not advice, not a recommendation).
Well, that was until last week’s breakdown.
Has it all-of-a-sudden moved to anxiety; saying it’s just a ‘healthy’ pull-back?
Pull-back or not, the chart of ETF tracking fund SLV, shows a nascent trend-line … down.
Silver ETF, SLV, Daily
There’s also a possible channel.
We may find out as early as tomorrow night, when Sunday futures open, if the above potential(s) are in effect.
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The Danger Point®, trade mark: No. 6,505,279
Sort Of
It’s not really the morning after but being the day after Friday’s action, we’ll call it even.
Two shorts closed and three opened.
Both the XLF, and UBER, shorts were closed; one with profit, one not. Then, three more opened (not advice, not a recommendation).
As stated in the comments on this previous post, it’s possible the banking index KRE, is not going to make it to Fibonacci Day 34, this Wednesday.
Time counts are always secondary to price action.
Next up, is the silver market.
It’s a no-brainer that something’s ready to break. The press and YouTubers, et al., would have you believe that were finally ‘putting it to the man’. The ‘paper manipulation’ is over, so it goes.
Mabe that’s right this time around.
However, I’ll stick with the market-makers that have been in control since the buttonwood tree. 🙂
More updates to come with charts and positions.
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The Danger Point®, trade mark: No. 6,505,279
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