Silver is looking over the edge of what looks like the "Grand Canyon" on the 1 year daily chart, see right hand side below.
I have highlighted the past three month price action on the daily chart, see left hand side below. In the near term these trendlines in the recent price action are key reference areas for me.
Should the lower "minor" trendline support break on that 3 month chart, the big deal will then become the $26 horizontal price level or MAJOR SUPPORT.
I am a strong believer in precious metals as money, savings, and an insurance vehicle, and I have also been looking to buy for the intermediate and long term, this is no secret. Friends would most likely consider me a "gold bug". But I'm also not stepping in to add support here or at $26 for two reasons. One, there is no way to know if big money longer term time frame traders will be back to do so again if it gets near $26. And two, should the bulls not only not buy or add to their holdings, but rather decide to throw in the towel and liquidate, it could get real ugly on a pattern such as this one.
I have learned the hard way that the only true voice worth listening to is the voice of the market, and certainly not the voice of the ego.
In the meantime, the bulls want to see silver breakout to the upside of this near term triangle which today would be around $27.75.
My analysis is based on probabilities from my own experience. Nothing is a prediction. I don't have any issues paying up for silver if there is a breakout to the upside from here, but I also welcome the opportunity to buy at much lower prices as well should there be a lower risk and higher probability reversal pattern whenever or should that ever come.
(Click on chart to expand)
The pattern is a volatile and precarious one in gold as well. My most recent post on gold can be found here: http://scottpluschau.blogspot.com/2012/07/gold-once-again-reacts-at-critical.html
I do my best to tweet out my posts promptly on twitter/ScottPluschau
Consulting? ScottPluschau@gmail.com
About the author
