Posted on Oct 13, 2023, 08:10 by Dave Toth
Today’s continued, impulsive and accelerated recovery above our 1921.7 key long-term bear risk parameter confirms the market’s gross failure to sustain late-Sep/early-Oct’s meltdown below a ton of former support-turned-resistance around the 1921-to-1900-area. The extent and impulsiveness of this recovery, regardless of its probable safe-haven flight due to middle east events, renders the entire 5-month relapse attempt from 04-May’s 2085 high to last week’s 1823.5 low a 3-wave affair. Left unaltered by a relapse below 1823.5, this 3-wave decline is considered a corrective/consolidative event that warns of an eventual resumption of Nov’22 – May’23’s major uptrend to new highs above 2085. Per such, 06-Oct’s 1823.5 low serves as our new long-term parameter from which a resumed bullish policy and exposure can be objectively based and managed.
On a shorter-term basis, the 240-min chart below shows today’s accelerated continuation of the past week’s reversal that leaves yesterday’s 1880.6 low in its wake as the latest smaller-degree corrective low this market is now minimally required to fail below to defer r threaten a more immediate and broader bullish count. Per such, this 1880.6 level serves as our new short-term and only practical bull risk parameter from which a bullish stance can be objectively based and managed. Even for longer-term commercial players, risking bullish exposure “up here” to last week’s 1823.5 low is impractical.
Lastly, the weekly log chart below shows the clear 3-wave nature of May-Oct’s decline from 2085 to 1823.5 thus far. Against the backdrop of Nov’22 – May’23’s major uptrend from 1618 to 2085, this year’s 3-wave setback cannot now be ignored as a correction that warns of a resumption of the major bull trend that preceded it.
These issues considered, all previously recommended bearish policy has been nullified. Both short- and longer-term traders are next advised to move to a new bullish policy and first approach setback attempts as corrective buying opportunities with a failure below 1880.6 required to defer or threaten this call enough to warrant neutralize that exposure (unless you’re of a longer-term risk profile that can accept risk to last week’s 1823.5 low). Until and unless this market fails below at least 1880.6, further and possibly protracted, long-term gains are anticipated.
As a result of this market’s recovery above our long-term bear risk parameter at 22.64, the technical construct and expectations for this silver market are identical to those detailed above in gold with our new key short- and long-term bull risk parameters defined by yesterday’s 21.88 smaller-degree corrective low detailed in the 240-min chart above and 04-Oct’s 20.85 key low shown in both the 240-min chart above and daily chart below. In lieu of a relapse below at least 21.88 and especially 20.85, the past 5-month relapse from 05-May’s 26.435 high is considered a 3-wave and thus corrective event that warns of a resumption of Sep’22 – May’23’s major uptrend that preceded it.
These issues considered, all previously advised bearish policy and exposure have been nullified and traders are advised to move to a new bullish policy and first approach setback attempts as corrective buying opportunities with a relapse below 21.88 required for shorter-term traders to step aside and commensurately larger-degree weakness below 20.85 for longer-term players to follow suit. In lieu of such weakness, further and possibly protracted gains should not surprise.