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Since my last article on Silver ‘Searching for a Silver Lining’, I have been stalking Silver for a setup to appear under the 50% level of the run down from 25 April to 12 May. There were a few strong down days after 23 August, which were supported by good volume but no convincing move under the 50% level. While 2 September looks like a first lower swing top, the only time since then that we have seen it close comfortably below 50% was 12 September (last night’s action at the time of writing).
Chart 1: SI-SpotV Daily Bar Chart
click chart to enlarge
Of course, watching the swing charts is essential and apart from the 1-day chart (which is uncertain), the trend on all the other swing charts is most definitely up. In the absence of a clear turning point, we must rely on the swing charts and trade with the trend. Note however that we are seeing expanding ranges to the downside and contracting ranges to the upside. Perhaps this is an indication that Silver is about to turn but I would like to see it come back and bounce under the 50% level to give a nice, clear short entry opportunity.
Chart 2: SI-SpotV Swing Charts
click chart to enlarge
Now let’s look at the bigger picture and consider how many sections we have seen play out. Could we see another section up? Are we looking for the start of a new section down? Or are we just going through a period of accumulation or distribution? Gann tells us that markets usually run in three to four sections and Chart 3 suggests that we have seen four sections up in the recent bull market and that a bear market may be about to begin.
Chart 3: Sections of the Market on SI-SpotV
click chart to enlarge
As we know, history repeats and mid-late September has often produced a turn in the Silver market. (This is the type of work we do with Master Time Cycles in Gann Mastery workshops.) Late September is a time when we watch the seasonal dates on other markets (such as the SPI) and I will also be watching this period in the Silver market with a view to taking advantage of any potential setup.
It’s the Journey
Lauren Jones
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