Silver and Gold have made some decisive moves of late. It must be emphasized that the long-term trend in Silver and Gold is up. I believe we are now witnessing a Silver Bull Market and a Gold Bull Market. Despite the fact I have preferred the long side of Silver over the long side of Gold, I have grossly underestimated the power of this Silver trend. Thus, a reappraisal of the Silver chart is in order.
The advance on Jun 29 met the target of 18.52 established by the Apr 12 completion of an 8-month H&S bottom. As a result, Factor is now flat in Silver. This trade ended up as a 554 BP profit, thus establishing Silver as a qualified member of the 2016 Best Dressed List and a Bottom-Line trade for Factor.
Silver Bull Market
It is possible to interpret the strength in Silver this past week as the completion of a possible 33-month H&S bottom with an extremely abbreviated right shoulder. The target of this pattern is 22.40, although a retest of the 2011 and 2012 lows just above 26.00 is very possible. I am most interested in buying a meaningful correction in Silver, although I doubt that a hard retest of 18.00 (right shoulder high) will occur. Traders who focus on Fibonacci corrections should remain alert.
(Click on image to enlarge)
(Click on image to enlarge)
Gold Bull Market
The broadening pattern is typically reversal in nature. Very rarely will a continuation broadening pattern occur. The advance in Gold in early Feb 2016 completed a 16-month falling wedge bottom with a target of 1392, as shown on the first daily chart shown below.
(Click on image to enlarge)
The advance on Friday reconfirmed the likelihood that the broadening triangle is continuation in nature — with a target of 1407. Thus, the next target in the bull Gold market is in the 1392 to 1407 zone. Factor established a long position in Gold on Friday afternoon.
(Click on image to enlarge)
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