Today’s sharp recovery above Fri’s 23.345 high AND 03-Jan’s 23.44 high not only nullifies the bearish divergence in short-term momentum discussed in Fri’s Technical Blog, but also revives a base/correction/reversal count introduced in 17-Dec’s Technical Blog. As a direct result of this today’s rebound, the 240-min chart below shows that the market has identified smaller- and larger-degree corrective lows at 22.82 and 21.945 that this market is now required to fail below to defer and then threaten our bullish count. Per such, these levels represent our new short- and long-term risk parameters from which a resumed bullish policy and exposure can be objectively rebased and managed. Former lower-23-handle-area resistance would be expected to hold as new near-term support.
The daily chart above shows today’s resumption of mid-to-late-Dec’s initial counter-trend recovery. Especially stemming from the extreme lower recesses of a range that has constrained this market for the past 17 MONTHS, the rally from 07-Jan’s 21.945 low is either the completing C-Wave to a broader bear market correction OR the dramatic 3rd-Wave of a developing bullish count that could be major in scope. Always biasing WITH the trend, traders are advised to maintain or re-establish a bullish policy and exposure.
Traders are reminded of the labored and merely lateral sell-off attempt from Aug’20’s 29.915 high that, on the heels of Mar-Aug’20’s 11.64 – 29.915 explosion, is first approached as a 3-wave structure as labeled in the weekly log chart below. Left unaltered by a break below the pivotal 21.41 level that has supported it for months, this 3-wave, 17-month lateral chop is considered a corrective/consolidative event that warns of a resumption of the secular bull trend that preceded it. It would not be off base to say that until and unless this market trades $2.00 low to levels below 21.41, it could be in the early stages of a resumption of the secular bull trend to levels above $30.00.
These issues considered, a bullish policy and exposure remain advised for longer-term commercial players and (SLV) investors with a failure below 21.945 required to negate this specific call and warrant its cover. Shorter-term traders whipsawed out of bullish exposure following Fri’s short-term mo failure, are advised to first approach a setback to 23.345 OB as a corrective buying opportunity with a failure below 22.82 negating this call and warranting its cover. In lieu of at least sub-22.82 weakness, further and possibly accelerated gains straight away are anticipated.
