Earlier in the week I asked the question “Did Silver Bottom Last Week?” Although I wasn’t outright bullish, I did mention that July Silver crossed to the bullish side of a downtrending Gann angle inside of a major retracement zone, a pattern that often leads to the start of a strong rally. I also noted that the main trend wouldn’t turn up on the daily chart until the main top at $31.47 was violated. Since it was a long way from the price action, I thought that a small “W’ pattern would form and thus create a lower breakout level.
Well, since the last main bottom at $29.99 was violated this week, the trend is still down. In addition, the market is now trading below the retracement zone and on the bearish side of a downtrending Gann angle at $30.24 today. If there is a silver lining (excuse the pun), a new swing top and potential change in trend level has moved down to $31.47.
Look for prices to continue to drift lower as it straddles the downtrending Gann angle moving at a pace of .16 per day. Closing over this angle will be a sign that a bottom may be forming, but the market will then have to regain the Fibonacci level at $30.74 to actually show strength. Even if the market stops making new lows, it still has to form a support base in order to attract new buyers. If this occurs then maybe it will build enough momentum to fuel a breakout through $31.47 and change the trend to up.
For more information, please visit http://patternpricetime.com.
