With its position well below the ‘205 parameter’, I am not trying to look for positives because that was below our tolerance to begin with. When the Ukraine hype failed as expected our targets were 220, 210 and finally 205 respectively to keep things in order. They are all history.
But I do want to note some things about the weekly chart pattern just so we are not caught being overly bearish during a time when a reversal is possible due to the mini mania going on in USD (along with heavy commercial hedging of USD) and silver is getting wildly over sold vs. gold.
Very simply, when the 2013 point 2 below showed up, it put a weird distortion on what I had projected might be a neat bottoming pattern. It messed up the ‘Head’ of a then theoretical Inverted Head & Shoulders. In effect, it put a small Shoulder on the Head. It also caused a ripple in the fabric of things by making a higher low to point 1.
Fast forward to today as 2014’s point 1 makes a lower low to point 2. This at least closes out the distortion that was the original point 2. So if this chart were to assert its happy analysis, the current point 1 is the mirror opposite to the 2013 point 1 and then it would be up up and up some more if reverse symmetry is any guide.
You know me well enough by now to know that I am not going have us get caught in a position where we are hoping for certain outcomes. But I saw a potentially bullish message in this chart and wanted to bring it to your attention. I think we have done enough bearish work to this point that our feet are firmly planted and we can handle a bullish scenario in a rational manner.
The time to be watching this potential scenario would be if HUI bounces and rises above the most recent point 2 on any bounce. Obviously it is still in the red down trend channel however, so that is still the reality, while this update deals in theory.