Silver Circle

SILVER CIRCLE

Note: The gaps referred to in this article are those evident during the recent steep fall in the daily candlestick charts of silver.

I have been tracking daily silver using this chart...

http://isht.comdirect.de/charts/big.chart?hist=10d&ind0=VOLUME&&lSyms=SLV.FX1&lColors=0x000000&sSym=SLV.FX1&hcmask=

It is a 15-minute tick chart that shows just over a week at a time. Back at Contrarian Thinker Central I have been carefully pasting these charts together. This gives me a uniquely detailed view of a bigger picture. The following analyses are based on the down-side portion of that chart, post $8.40. The chart is linear, not log, but it seems to work quite well with respect to channels nonetheless. However, it is not channels I am focusing on primarily here.

1) Circular Silver

Note that the paste-up is much smaller than the full-scale original - a 'Zoomed-In' current portion accompanies each larger chart in 1:1 scale.

Silver was in a steep linear decline when first it fell off its $8.40+ perch. This trajectory appears to have been finally arrested by what I had previously identified as huge resistance, now support. In fact, before silver broke through $5.40 I posted that once through $5.50 silver would never fall below $5.40 again. We came close, but still a cigar.

This area is intersected by a massive frame line as per my previous posts on silver. Then there is that inverse H & S dating back to 1983. Breakout here was somewhere between $5.35 and nearly $6.00 depending on which chart you use. I'll settle for $5.50 - the top of a semi-transparent green zone holding up the circular charts - a force field that sets up an almost magnetic repulsion to the incoming silver price. (I say almost magnetic, since silver is a non-magnetic metal).

We have convincingly IMO put in a double bottom at $5.50.

2) Breakdowns & Breakouts

There are three charts in this section.

Note : What you see in 'Zoom In' above is a Head, Shoulder & Epaulette. The First shoulder is off the chart.

As we can see from the above 3 charts there is plenty of technical support for a measured move into the lower of the two big gaps down in silver (shown as very steep drops of dollar magnitude on the 15-min chart). I would expect once the price enters the gap it would swiftly be filled, probably followed by a retracement.

The point marked 'interesting' on the second of the above set of three breakout charts could be the launch for this move, or it could mark the low of the retracement from it, or it could mean nothing at all!

It is 'interesting' because...

1) It intersects the circle at the same level as the measured move AND the depth at the centre of the head and...

2) The three significant points on this horizontal line are equally spaced.

Note also that a launch BEFORE this interesting point (to at least the top of gap 1) followed by a retracement TO it would set up an inverse head and shoulders with a PO in the region of $8.

3) Circular Fans

Blue apex is about a day and $3 from 'Interesting'.

Several support/resistance levels identified by price action intersect with fan lines crossing the circumference of the circular envelope. In fact, looking at the 'Zoom In' just above I wonder if my circle is perhaps drawn too tight with respect to the right hand side by about 12 hours?

4) Nested Pitchforks

Above are two nested Andrews pitchforks scaled 1:2.

1) Where the top tine intersects the circle, so too would the support rail of the power-up channel that took us to $8.40. (Not shown on these charts but visible on my tablecloth-sized silver map).

2) The middle tine of the smaller fork hits the circumference at the top of the first gap.

Conclusion

It appears the PM sell-off may have been overdone based on false assumptions. The investment community may have been blindsided by deflation fears. In which case the counter-reaction could be violent, especially if the HUI neckline is violated again to the upside. This would fulfil the most challenging criterion of the XAU, HUI, Gold and other spectrum charts - a fast and large spike up reflecting spikes down in 1997/98. For example, an earlier gold spectrum may be viewed at the following URL

www.contrarianthinker.com/Spectr3.gif

It probably needs updating, but you get the picture.

In the past 12 months I have gravitated towards spectra, geometry, symmetry, and fractals in my attempt to divine the future from the past. This latest analysis falls back on more traditional methods and comes to a similarly bullish conclusion.

Short- and even medium-term distortions in the price-time continuum can deform the surface, but leave the cell structure unchanged.

Technical analysis using spectra, geometry, symmetry, fractals and Fibonacci series may be able to penetrate deep into underlying price/time structures, just as x-rays can peer into a crystal lattice.

Recent chart formations may have been relatively easy to paint. The 600 year chart of silver is not.

Appendix

Stockcharts log daily. Note if gap is closed silver will have broken thru 200 & hit 50 ma.

2) 24/05/04 Another measured move uncompleted - turned back at the green neckline. Looks like once we get thru it there will be some force behind the move.

www.contrarianthinker.com/two_services_for_the_serious_phy.htm

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