- with at 5th wave throw under
- with a kiss of the bottom support line
- with a trip to center channel on the 5th wave which results in an inclining double bottom
But instead of going red with the markets after the head fake up, USLV simply pulled back and stayed green all day. That is not bearish my friends. It smells like accumulation into weakness to me. I see 3 likely finishes to this silver bear as modeled below. I think the most likely is the middle one. But if the 30 degree down sloping resistance line is broken, buy with both hands as that will be the second confirmation. If it happens with gaps and gusto then all the better. Once it breaks that line, simply set stops below it and go about your life.
The reason I am starting to think that the breakdown below the lower channel will not occur is that these waves are all supposed to be a-b-c. In order to break below the lower channel the pattern would certainly be 1-2-3-4-5. I'm not saying it can't happen and in fact I hope it does because it would provide a much lower buy point for me. But do not be surprised if metals and miners catch a bid in the next 1-2 weeks.
The other main silver related chart I am watching is PAAS which is a profitable, dividend paying silver miner. After a big wave 1 up it has now put in an A-B-C back to the 50% fib. That is a very bullish pullback for such a volatile equity. If this count ever goes below $12.60, if you are holding this stock you might want to bail out and rethink because my count will be invalidated. But don't get shaken by a move down to $12.80 or $12.90 at this point because I expect that. It would form a bullish inverted Owl and the next wave up would be 3 of 1 of 3. It could contain gaps and move with gusto.
So I reiterate that we are at a critical technical juncture here and that smart traders will be on high alert waiting for just the right wave setup to jump in on the long side.
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