SLV is trading in a large Bull Flag and just reversed back up and turned its 3 Chart back up last week.
Backstopping the bullish setup is that SLV undercut horizontal support, leaving a weekly Bottoming Tail on the week of September 27.
SLV rallied up to its declining 20 week moving average last week at the same time it turned its 3 Week Chart back up.
So this week is pivotal.
Either it will be rejected from this test of its 20 week or, bullishly, it will follow through after turning its 3 Week Chart back up.
To recap, the 3 Week Chart turns up with 3 consecutive higher weekly highs (not closes).
The last time SLV did this was mid-April. After a Pause Week, an NR 7 (narrow range week) in late April, SLV continued to rally in a choppy versus impulsive fashion for the next month.
However, SLV has a more potentially constructive pattern currently: last week it triggered a weekly Rule of 4 Breakout, which implies follow through.
If SLV can clear and capture its overhead 50 week moving average at 23.50, it opens the door to a test of resistance in the 26-27 region, which ties to lateral triple tops over the last 14 months.
When market participants are bullish the metals, they look for leverage and buy the miners which can rally 3 to 4 times more than the price of silver or gold.
For example, silver miner AG rallied from 10.50 to 13.80 so far in October before tailing off on Friday.
It will be interesting to see how it behaves following Friday’s reversal.
If SLV can breakout above its 20 and 50 week moving averages, it means it has some upward momentum and then the first positive pullback is a buying opportunity.
In sum, technically silver is still not out of the woods, coming up to resistance, with leading indicators like the miners outperforming — a sign that an uptrend is starting.
At the same time, GLD shows 2 inverse Head & Shoulder bottoms… one from June and one from last November.
In sum, from the important swing high in early February, early November is 9 months, or 270 degrees.
A positive pullback into the beginning of November followed by upside follow through would be a bullish feather in the bulls' metals cap.
If the stock market pauses/pulls back after its strong surge and the miners and metals maintain a bullish perspective, that is a sign that the metals are beginning to uptrend in earnest.
Conclusion. Consumer price inflation is running near a 30 year high in the U.S.
On Friday, Fed Chair Powell acknowledged that inflation pressures “are likely to last longer than previously expected.”
When inflation cycles start, they don’t last for months; they last for years.
In Big Sur, California, gas is selling for $8 a gallon.
In Malibu, where I live, gas is $5.25.
Gold is down 6.2% over the last 12 months.
Silver is down 1.8% over the last 12 months.
Copper is up 44.2% over the last 12 months.
WTI oil is up 110% over the last 12 months.
Bitcoin is up 363% in the last 12 months.
The U.S. market/GDP valuation is at a record high of 207%.
US budget deficit hits $2.77 trillion in 2021, second highest.
Russia’s gold reserves rise 2,298 tons as the Battle At $1800 continues.
You think something’s gotta give?
My cycle work indicates the next 3 to 5 years could change everything you know about making money.
