NOTE: All charts are logarithmic and are traced from
I was reading the Sunday Times motoring section. They had an article on the new Ford GT40. The car looks stunning, and at £100,000, a snip. That's only £500 per mile per hour. I remember the Gulf Oil sponsored GT40's that won Le Mans. In their honour I have utilised the clashing orange and blue livery for the trend-lines in the first figure of this article.
I have included a rate of change indicator (ROC) in this analysis. As usual, the price chart resolves into parallel line sets. So too, however, does the ROC plot. I must admit, I have not even looked up the definition of ROC, but from what I can see it is a measure of 'up-ness' versus 'down-ness' with long-term trend removed, enabling a plot that oscillates about a linear axis - the y axis in Cartesian co-ordinate geometry. Looks a bit like a .wav file to me, in fact.
We seem to have 2 intersecting trends, one up and one down, with approximately equal inclinations but opposite signs. In the Silver Sharks figure from the Silver Solutions article we saw the silver price drop precipitously out of the bottom of the bearish steeply ascending triangle the day after posting!
It is difficult for a price to break upwards from a steeply ascending triangle, as this would imply an even steeper angle of ascent. Similarly a descending triangle can be bullish. In the above diagram, every intersection of an orange and blue line describes a triangle. However these triangles are neither ascending nor descending. A symmetrical triangle is neither bullish nor bearish by itself. The direction of breakout should be determined by the macro trend - either fundamental, or long-term sinusoidal wave, or a combination of both. The macro trend in silver has been dealt with extensively elsewhere on this site, and IMO is decidedly bullish.
The above figure shows two silver envelopes. The solid grey lines differ from the dotted lines in that they include short sharp spikes. Both envelopes are drawn using only 1 point per sense change in my curve-drawing program, as are the two reference sine waves shown above and below the price chart. This disallows me from fiddling with the shape of the curves.
The envelope excluding spikes is of fairly constant width, and is clearly sinusoidal with a 5 year cycle. The envelope that includes spikes is less regular, and is more closely allied to the 4-year U.S. presidential election cycle.
In the next figure I superimpose a fan onto the envelopes.
Each fan line is tangential to an envelope wave.
The focus of the fan is a point early in 2004.
Note also that in the above figure I have dropped all but two pairs of trend lines from the ROC chart. The Silver Arrows are beginning to crystallise out of the Silver Solutions.
The entire silver price chart is driving hard into a symmetrical triangle of monumental proportions. Not just one symmetrical triangle, however, but a coalescence of triangles all focused on the same point, '1'.
A symmetrical 'spinning top' is forming. The angles subtended either side of the red arrow's shaft are identical. I have observed a similar formation in the HUI, CDE, BGO and other charts. It seems to be a sign of the times.
Arrows 3 and 4
I have saved the best for last. The last two major price spikes (AB and CD) showed up both on the price chart and on the ROC. It has been a while since the last one - another is overdue. But when?
A closer inspection of the ROC reveals that spike CD was a huge leap out of a symmetrical triangle that had formed in the ROC indicator, one subtended by the previous spike AB. This spike in turn has subtended another symmetrical triangle, the arrow tip of which is RED HOT as I write. Line b,d,e here we come.....
(Spike AB also came from an arrow tip - I have not checked to see if this was subtended by a previous spike.)
Going back to arrow 2, I found that this shape maps on to the silver chart all over the place. Just look at this....
Maybe I will be able to afford that GT40 after all?
P.S. Worried about shorting the DOW? If down arrows portend an upward trajectory, what do up arrows that also look like BEARISH ASCENDING TRIANGLES portend?
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