The S&P and Russell are still at a bit of an inflection point. Patterns for both directions are plausible. Meanwhile, silver was down 17 days straight. When silver crossed over its down trend line and also formed a potential leading expanding diagonal pattern, we issued a potential buy alert on May 10.
Hard to say whether the trade will work – as we did not expect Silver to get this low. However, there are reasons that support at least a bounce – shown below.
Here’s what actually happened. At the open, it appeared we might be bouncing – but it looks like the market was weaker than expected but managed to pull up just a little bit after the market closed on Friday.
From a zoomed out daily perspective – Russell is right at the gap support area of 1380. This region was previously resistance in early April – and has now been acting as support. If there is no bounce in the near term for Russell, this could turn down into something more bearish.
Silver has been slaughtered some 17 days in a row – and it has not been easy to find a decent buy entry.
However, we have been monitoring potential wave pattern formations as well as the down trendline that has been forming. We decided to enter silver at around 16.2 based on these 2 reasons.
Here’s the down trend line – that included a back test and consolidation on May 10.
On Thursday, we posted the below chart on Silver – suggesting the possibility of a leading expanding diagonal.
Here’s that same diagonal – zoomed out a little bit — so far we have formed some green movement – something we have not seen for some 17 days straight.
From a larger term perspective, silver has previously found support in the 16 region in the past year or so — once in June of 2016 – and then again around Christmas and New Year’s Eve into 2017.
We find ourselves at that 16 support level once again now.
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