In part two of the Quarterly Report I’m going to update some long term charts for some of the world stock markets. As you will see many have formed massive ten plus year consolidation patterns similar of what we observed in the first installment of the Quarterly Report which are similar in duration to many of the US stock markets. It’s these big multi year consolidation patterns that are strongly suggesting to us that the world as we know it is not coming to an end as so many analysis would like us to believe. For whatever reasons bear market news tends to grab investors attention much more so than bullish news. It has to work that way because if everyone was bullish, that comes at the end of a bull market, there would be no one left to buy. I’ve often said that, “investing in the markets is psychological warfare more than anything else.”

Lets get started by looking at the $AORD, Australian stock market, which built out a ten year triangle consolidation pattern. The top rail was broken to the upside in early 2017 with a small rally and now a strong backtest which found support at the last possible point which is the apex where the top and bottom rails intersect. A move below the apex would be an end around move which would have bearish implications, but until then the bull market remains in place.

The $BSE, India Bombay stock market, has held up very well and is just a few of the markets that are testing their all time highs. It’s like the energizer bunny that just keeps on going and going.

This next world stock market is the $BVSP, Brazilian Stock market, which is one of the strongest in the world right now after completing a perfect breakout and backtest to the top rail of its ten year triangle consolation pattern.

The $CAC, French stock market, is still in the breaking out and backtesting process. The strong backtest was nullified when the price action traded back above the top rail of its 17 year triangle consolidation pattern.

The $DAX, German stock market, broke out from its massive 12 year triangle consolation pattern around the same time many of the US stocks markets in 2013. It’s currently working on a multi year rising wedge formation that is forming above the top rail of its 12 year triangle consolidation pattern which is generally a bullish setup, but won’t be confirmed until the top rail is broken.

The $HSI, Hong Kong stock market, shows a similar setup to many of the stocks markets from around the world. It has formed a ten year triangle consolidation pattern with a strong backtest to the top rail that occurred late last year when the US and other world stock markets experienced the Christmas Eve shakeout move.

The $NIKK, Nikkei stock market, is one of the most important stock markets in the world so it’s always a good to see what it’s doing. The $NIKK originally topped out in the middle of 2015, but has been trading sideways and is building out a rising wedge formation. Note the backtest to the 2016 H&S bottom neckline which showed me a place to draw in the bottom rail of the rising wedge. Most will view the rising wedge as a bearish rising wedge but I’l reserve judgment until I see which trendline gives way. Note the smaller blue bullish rising wedge which formed just below the bigger one.

Next is the $TWII, Taiwan stock market, that has built out one of the longest running consolidation patterns I’ve ever seen which took 30 years to complete. The breakout above the top rail finally took place in May of 2014 with a fairly strong backtest to the top rail doing its job of holding support.

Another very important world stock market is the $SSEC,  Shanghai stock exchange, which has been one of the weaker stock markets, but may be turning the corner. This long term monthly chart shows the major uptrend channel the SSEC has been in since the early 1990’s when it was new to the global scene. When it gets ready to move it doesn’t waste much time. This stock market index like so many we’ve looked at had a false breakout below the bottom rail of its major bull market uptrend channel in late 2018 which now appears to be another false breakout or bear trap. This month the price action closed above the top rail of the blue bullish falling wedge which completely changes the negativity this index has received. Normally when you see a false breakout or bear trap and price action reverses back up to negate the false breakout, you can get a stronger move in the opposite direction and in this case up.

The $TSX, Toronto stock market, has been building out a ten year six point rising wedge formation. It has been attempting to breakout above the top rail for over a year which so far has failed. On the positive side the price action is trading very close to new all time highs. Since this is a commodities related stock index it should have bullish consequences for commodities in general if it can breakout strongly above the top rail.

If the world is going to move forward in regards to what their stock markets are suggesting then the emerging markets should also participate. Below is a long term monthly chart for the VWO, emerging markets. After a strong rally out of its 2009 crash low the VWO has been in consolidation mode for the last six years building out the flat top expanding triangle consolidation pattern. Again, like so many other stock market indexes we’ve looked at, this emerging market etf also experienced a false breakout below the top rail of the expanding falling wedge, but reversed direction leaving behind a bear trap. I’m also viewing the six year flat top expanding triangle consolidation pattern as a halfway pattern as shown by the blue arrows.

This last chart I would like to show you for this part of the Quarterly Report is the VEU, all world stock markets ex the US stock markets. The VEU has been in a nice steady bull market since its 2009 crash low. During the 2015 correction it built out a H&S consolidation pattern on the bottom rail of its 2009 major uptrend channel. Since the 2018 high when the US stock market topped out so did just about every other stock market on the planet. Since that 2018 high the VEU formed the blue flag and broke out above the top rail two full months ago.

What most of the world stock markets above are suggesting to me is that we should expect another leg higher in the secular bull market that began in 2009. Since these are long term monthly charts change comes slowly and we could see some backing and filling, but the big picture shows many of the world stock markets including our own are going to experience another leg up within their secular bull markets.

If the world stock markets are beginning to show some life then some of the underlying sectors within the stock markets should also be showing some positive chart patterns. You can’t have one without the other. As with every bull market there are leading and lagging sectors, but eventually they all generally get their shot at producing their own individual bull market.

If the secular bull market is going to continue then the tech stocks will have to be one of the leading sectors. One area within the tech sector that is giving us a good clue that the markets want to go higher are the semiconductors. They are doing something they haven’t done since their 2000 bull market top.

Below is a long term monthly chart for the $SOX, semiconductor index, that is now breaking out to new all time highs. The Chartology has been picture perfect. Since the 2009 bear market low notice how each impulse leg up is followed by a consolidation period which leads to another impulse leg up. This is a classic example of how a bull market is supposed to look. In the early part of January 2018 when everything was topping out so did the $SOX, but it topped out at its 2000 all time high which was a perfect place to see a consolidation pattern form. Most of the time when an important trendline or in this case the all time high is reached you will see a small consolidation pattern form just below that important area of resistance. Since the SOX has been in a bull market the odds were high that it would breakout to new all time highs which it is now doing.

The consolidation pattern that formed at the all time high was the blue expanding falling wedge which is also showing up on some of the other areas within the markets. It’s still possible we could see a backtest down to the 1350 area but the bulls have now taken back control of the semiconductor index. This area is going to be one of the leading sectors during the next phase of the bull market and is giving us an early warning that the bull market correction since the January 2018 may be coming to an end.

Below is the weekly chart for the SOX which shows a perfect breakout and backtest to the  top rail of the January 2018 bullish expanding falling wedge.

One of the strongest areas within the 2009 bull market has been the biotech stocks. The $BTK, biotechnology sector,  bottomed in 2009 putting it the fourth reversal point in its ten year flat top or ascending triangle. Note how tiny the 2009 decline was compared to most of the stock markets which in many cases traded below their 2002 bear market low. This small decline was showing relative strength which showed itself in the ensuing secular bull market that is still progressing along.

The BTK has been consolidating the previous impulse leg up topping out in August of 2015 building out the nearly four year rising wedge pattern. Most will view this rising wedge as a bearish rising wedge, but since it has been forming in the secular bull market the odds favor an upside breakout. If the price action breaks out below the bottom rail then I’ll be the first one to admit I was wrong.

The weekly chart for the $BTK.

Another area we would like to see perform well is the XHB, homebuilders, which is an integral part of the economy. Here you can see another 2018 bullish expanding falling wedge breaking out and is beginning to move higher after a quick backtest to the top rail last month.

XHB weekly chart with the bullish expanding falling wedge.

Below is the IYR, Real Estate etf, which is breaking out of from its 2016 bullish rising wedge formation in no uncertain terms. A backtest to the top rail is always possible but not necessary.

The weekly chart for the IYR.

Another very important area that needs to be strong during a bull market run is the XLF, financial sector, which is building out its own expanding falling wedge formation within its 2009 bull market uptrend channel.

This weekly chart for the XLF shows a potential very bullish setup with a H&S bottom forming at the last reversal point in the blue expanding falling wedge. I suspect we will most likely see a ping pong move between the neckline and the top rail of the bullish expanding falling wedge before the actual breakout takes hold.

Another area that has done exceedingly well since the 2009 crash low has been the XLV, Health Care sector, which had a four year uninterrupted impulse move into the first reversal point in a growing four plus year rising wedge formation. Again, most will view the 2015 rising wedge formation as a bearish rising wedge, but, “WHAT IF” the rising wedge is a bullish rising wedge? Note the massive 2009 H&S bottom which led to the uninterrupted move into the rising wedge. Big patterns lead to big moves and the XLV has built out a big pattern.

Another area that had a good bull market run out of its 2009 crash low was the XRT, Retail etf. It has been consolidating that first six year bull run forming a large expanding rising wedge formation which could very well be a halfway pattern to the upside.

This last chart I would like to show you tonight is the $XBD, Broker/Dealer index, which is forming its own 2018 expanding falling wedge with the H&S bottom forming at the fourth reversal point which is a very bullish setup.

This completes part two of the Quarterly Report with currencies and commodities to follow. I realize how ridiculous these long term charts are to someone that has been a perma bear for the entire secular bull market that started at the 2009 crash low. How can the markets just keep going up? It makes no sense. That’s why the markets keep going up because they make no rational sense from the bearish perspective.

This greatest bull market of all time is going to come to and end one day and when it does there will be a multi year correction that could last 10 to 15 years or even longer as we saw in gold after its 1980 bull market high. Secular bull markets are rare but I’ve been lucky enough to have lived and traded during the 1980 to the 2000 secular bull market that changed my life forever and now I’m lucky enough to be part of our current secular bull market that began in 2009.

Experiencing one of these secular bull markets in ones lifetime is great but for most investors they will never see it until the end when everyone piles in with reckless abandon. We still haven’t gotten to the IPO stage where stocks that are virtually worthless will be bid up to astronomical prices. The mania phase will come but it’s not here yet that’s what these big chart patterns are suggesting. Maybe after this next big impulse leg up we’ll see the mainia phase and with a little luck we’ll get out in time to enjoy our profits. All the best..Rambus

There is a ratio chart, $Gold:$XAU, we haven’t looked at in quite awhile that has helped us in the past to locate some important turning points for the PM stocks. I’m not going to get into all the details tonight but this ratio chart shows you just how undervalued the $XAU or precious metals stocks in general are to gold itself. From the mid 1980’s to the 2008 GFC crash the horizontal blue line was a good place to buy your gold and silver stocks and when the ratio fell to the red line it was a good place to sell those stocks.

Everything changed dramatically between gold and the gold stocks during that 2008 crash period. The green circle on the XAU shows where the failure occurred. Instead of the ratio dropping down to the red line like it had always done before the ratio broke out above the blue horizontal line in a way it had never done previously. At the time I labeled that initial high as the highest the ratio had ever been in history thinking the price action would decline back into the old trading range between the blue and red lines. As you can see that wasn’t the case at all. Instead of getting back to normal the ratio began to go parabolic to the upside and finally topped out in January of 2016 as shown by the small double top, yellow shaded area. That also marked the bottom for the XAU.

Once the small double top broke down below the 20 year parabolic arc I suggested we could see some reverse symmetry to the downside because the rally into the small double top was so vertical. We did get the reverse symmetry which also showed up on the 2016 rally phase for the XAU and other precious metals stocks. As you can see the ratio lost almost half of its gains in its vertical drop form 24.33 to the initial low at 12.50. The brown shaded area is where I was initially looking for support but the price action fell a little lower before coming to an end.

The ratio threw me a curveball as I was looking for the right shoulder to match the left shoulder in time and price, but it built a bigger 2016 blue rising flag as the XAU has been building out its 2016 bullish falling wedge. We could call the price action above the 12.50  neckline an unbalanced H&S top but I’m looking at the blue rising flag as more of a halfway pattern to the downside which would measure down to the 8.90 area which would be the initial 2008 high on the ratio chart.

Below is a close up weekly chart which shows you more details of the ratio combo chart above. As you can see from the 2016 low on the ratio chart, which was the 2016 high on the XAU, both have been consolidating their previous moves with the ratio building out the rising flag and the XAU building out its 2016 bullish falling wedge. It also looks like the XAU is giving us an early heads up as it has already broken out above the top rail of its 2016 bullish falling wedge and has completed a backtest. The ratio chart on top is approaching the bottom rail of its 2016 rising flag but hasn’t broken through yet. It will be interesting to watch the price action when they both trade to their respective necklines as those necklines are the same necklines we’ve been following on gold’s six year H&S bottom.

The way the ratio chart is setup with the first leg down out of its January 2016 double top all time high being so vertical, it’s very possible we could see a similar move to the downside when the bottom rail of its 2016 bear flag gives way. That also means that the XAU should also see a near vertical move to the upside similar to its 2016 thrust.

Sir Plunger will be doing the Weekend Report so stay tuned for his always fascinating and provocative post. Have a great weekend , happy spring and all  the best…Rambus

With the UUP ( US Dollar ETF) having a fairly large decline today lets update a few charts to see how they’ve been progressing. Back in August of last year the UUP began to build out a rising wedge formation with today’s price action completing the fourth reversal point when the UUP traded down to the bottom trendline. Sometimes when a stock fails to touch the top rail in a well defined pattern like the rising wedge the UUP is showing, it can be a warning sign that the energy just isn’t there and the stock has run out of gas. To complete the rising wedge we need to see the bottom rail give way which should usher in a strong move  for the PM complex and I would think commodities in general.

The last time I showed you this daily chart for the UUP I suggested there was something for both the bulls and bears alike. Since the February 2018 low the UUP has been building out a parallel uptrend channel which I labeled as a new uptrend channel. The UUP can correct all the way down to the bottom rail of the uptrend channel and still be in a bull market. It’s very hard to predict the future but one scenario I could envision is that while the UUP corrects within its 2018 uptrend channel the PM complex can experience a big move to the upside. Whenever the UUP comes into contact with the bottom rail of its uptrend channel that would be a good signal that the PM complex may need to consolidate its recent impulse move which I believe is just getting started. Something we can monitor.

This weekly chart shows the previous two falling wedges which occurred during the last decline with the first one being the blue five point bearish falling wedge reversal pattern. The other falling wedge ended up being a one year bullish black falling wedge. Note the smaller blue five point bullish rising wedge reversal pattern that formed at the 2018 low. Needless to say the UUP likes to form wedges of all kinds.

A couple of weeks ago we looked at this ratio chart which compares gold to the US dollar. At that time the ratio was backtesting the top rail of the small triangle reversal pattern near the bottom of the uptrend channel but failed to make it all the way down, red circle. Again, if the ratio can rally all the way up to the top rail of the rising channel the PM complex should have the wind at their backs.

This next chart is a combo chart which has the SPX on top and GOLD on the bottom. A lot of investors have a misconception about the stock market and gold. Most gold investors believe the stock markets have to crash in order for gold to rally which happens sometimes as shown by the white shaded areas. On the other hand some of GOLD’s biggest rallies have come in tandem with the SPX green shaded areas. Since their 2016 lows the SPX has rallied much stronger than GOLD but gold has also been trending higher. No one knows 100% for sure what’s going to happen in the future but it wouldn’t hurt my feelings to see both the SPX and GOLD rally together like they have done many times before.

Below is a simple weekly ratio chart which compares GOLD to the SPX using the 200 week sma. As you can see there are not many buy and sell signals, but if you get one it pays to follow it for the longer term. Earlier this year the ratio got close to the 200 week sma but failed to breakout above it. Also keep in mind ratio charts can be a bit deceiving at times. For instance both gold and the SPX can rally at the same time, but if the SPX rallies more strongly than gold the ratio will fall. What this ratio is currently telling us is that the SPX has been outperforming gold since the first of the year.

Below is a 50 year chart for the GOLD to SPX ratio using the 200 day sma for long term buy and sell signals. Again, you can see how well it works with very few buy and sell signals and only a few whipsaws over a 50 year period. There are two ways you can look at how the ratio interacts with the 200 week sma. First, when the ratio crosses above or below the 200 week sma you get a buy or sell signal. Also when the 200 week sma moves  from a rising position to a falling position you can get a buy or sell signal. If you get whipsawed always go with what the price action and the 200 week sma are showing you what to do. You may get whipsawed for awhile but the price action and the 200 week sma will always show you the long term trend which is your friend. The next time the ratio crosses back above the 200 week sma we know it will be time for GOLD to outperform SPX for most likely a fairly long period of time.

This next chart is a 10 year weekly ratio charts which compares the HUI to the SPX. In 2011 when the ratio completed the 9th reversal point in its multi year reversal pattern the SPX shed no sympathy on the HUI. This chart shows you a good example of what a bear market looks like with one consolidation pattern forming just below the previous one. Back in late 2015 it looked like the ratio was finally going to reverse direction when the red rectangle reversal pattern formed, but it wasn’t to be. Does the current 2016 falling wedge look familiar to you? That is the same one we are following on the PM stock indexes. This ratio may be seeing the light at the end of the tunnel and it may be time for the HUI to outperform the SPX for awhile. Remember they both can go up but if this ratio is rising the HUI is outperforming the SPX.

This last chart for tonight is another ratio chart going back 45 year which compares gold to silver. When the ratio is rising gold is outperforming silver. When the ratio trades above 80 that is a generally a good time for the precious metals complex as shown by the red dashed vertical lines. What we want to see is for the ratio to drop below 80 which would be another bit of confirmation the rally in the PM complex is alive and well.

We are seeing some signs that the PM complex is trying to bottom in this general area. To really get this beaten down sector back on its feet again I would like to see more confirmation take place on some of these ratio and moving average charts above. The bottom appears to be in place for the PM complex but it’s always nice to see confirming signals from different perspectives to add the frosting to the cake. All the best…Rambus

I know it may have come as a shock to some of you on why I raised some capital by selling a few PM stocks today. Whenever you see a false breakout of any chart pattern and the price action trades below the bottom rail of the original pattern that can setup a bearish situation. It’s like a head fake. The stock forms what looks like a great breakout and maybe even accompanied by a breakout gap. Everything looks fine. Then you get the backtest to confirm the breakout. Sometimes we can see several days of backtesting waiting for the breakout move to begin.

The first sign of trouble is when you see the price action trade below the breakout point or below the top rail in this case the bullish rising wedge. Many times the trade can still be saved if the bottom rail of the rising wedge ends up holding support. Once the bottom rail gives way then red flags start flying that something is amise. Many times when you see a false breakout of a chart pattern you can see a strong move in the opposite direction. Again, its like a head fake that gets you moving in the wrong direction before the real move takes place.

Lets start by looking at a daily chart for AU which built out a very nice looking rising wedge formation complete with a breakout gap above the top rail. AU was one of the leaders and it looked like it was showing the way higher for the PM stocks but after the reversal bar at the top of the chart AU declined back into the rising wedge negating the breakout. All was not lost yet as the bottom rail of the falling wedge could still provide support and save the pattern. Once the bottom rail was lost that put me on high alert to watch the price action very carefully for more deterioration. Monday morning AU opened with a downside gap and today the price action closed below the 50 day ema which strongly suggested to me it was time to get out of this trade.

All is not lost yet however as AU could be in the process of building out some type of consolidation pattern with the first reversal point being the false breakout high. What we need to see next is for a low that would create the second reversal point, another rally followed by one more reversal to the downside to create some type of four point consolidation pattern. Right now there is no way to know what kind of consolidation pattern may form. One important aspect of this daily chart is the one year H&S bottom which should support a much bigger rally than what we’ve seen so far. As you can see the rally out of the August low was very strong so now is as good a time as any to see AU consolidate those gains.

Below is a weekly chart for AU which shows its strong impulse move out of its 2016 bullish falling wedge. Note the blue triangle that formed in the middle of the 2015 bearish falling wedge as a halfway pattern to the downside. As AU was in a strong decline one would have expected the triangle to breakout to the downside. AU is now moving higher so we should expect to see whatever consolidation pattern builds out should breakout to the upside.

BTO.TO also built out a nice looking rising wedge formation but it too failed to take off and should now be forming some type of consolidation pattern on top of its H&S neckline.

I was hoping that the rising wedge was the consolidation pattern that was going to give BTO.TO the energy it needed to finally takeout that massive overhead resistance line that goes all the way back to the 2011 high. There is already the 2016 rectangle that has been forming below the 2011 high. That will be a big deal when BTO.TO finally moves above that massive line in the sand. There are just a few PM stocks that are trading near their all time highs.

XGD.TO is another PM stock that had a false breakout above the top rail of its rising wedge but failed to follow through to the upside.

This long term weekly chart still looks good with the top rail of its 2016 falling wedge and the 30 week ema coming in at 11.25.

The only real question is will we see a complete backtest to the top rail on this long term monthly chart?

The daily chart for GPL shows it has formed a rising wedge above its nine point rectangle reversal pattern. As you can see it has been in backtest mode to the top rail for about a week now with the 200 day sma helping so far with support. As long as the price action can trade above the bottom rail of the blue rising wedge I will hold on to my position.

This weekly chart for GPL shows the problem I’m seeing with many of the PM stocks I follow. Most have put in some type of small reversal pattern at the fourth reversal point within their 2016 falling wedge or downtrend channel. Many have now rallied up to the top rail and are backing off which tells us the top rail is still hot. We had a similar situation back in 2013 when the PM stock were breaking down from their massive 2011 H&S tops. They all didn’t break their necklines at the same time. Back then the weakest PM stocks broke down first with the rest taking their turn until GG I believe, was the last one to finally break below its neckline. In our current setup we should see the strongest PM stocks breakout above the top rail of their 2006 trading range first with the laggards to following behind.

GPL monthly. Close but no cigar just yet.

AR.TO shows a perfect example of the small reversal pattern forming at the bottom of its 2016 falling wedge with a rally up to the top rail. It’s now backing down and hopefully will find support on the neckline before it tries to take out the top rail again.

This long term monthly chart for WPM shows it has broken above its 2016 bullish falling wedge but has another important area of resistance to overcome which is the top rail of the black 2011 expanding falling wedge. We could even see a ping pong move between the blue and black trendlines.

SAND is setup a little differently as it formed a symmetrical triangle as its 2016 consolidation pattern and has broken out above the top rail. Note the small double bottom that formed at the last reversal point.

SAND is currently trading between the top rail of its 2016 triangle consolidation pattern which is the right shoulder of a very large H&S bottom. Here too we may see a ping pong move between the neckline and the top rail of the blue symmetrical triangle.

This weekly chart for AEM shows the price action touching the top rail of its 2016 falling wedge and backing off a bit.

The long term monthly chart for AEM shows the 2016 falling wedge forming inside of the massive 2008 rectangle.

This long term monthly chart for BVN shows the 2016 bullish, RISING WEDGE, forming the right shoulder of a very large H&S bottom.

FNV broke out of its 2016 bull flag and looks to have completed a backtest to the top rail.

FNV has always been one of the leaders when it comes to the precious metals stock. This long term monthly chart is a “WHAT IF” chart. What if this is a massive bullish rising wedge?

RGLD is another precious metals stock that leads the rest of the PM stocks higher. It too has a “WHAT IF” possible bullish rising wedge. Note the blue rectangle that formed at the fourth reversal point.

This long term monthly chart for NEM shows its been building out its 2016 falling wedge but unlike a lot of PM stocks it hasn’t been able to rally up to the top rail and is showing relative weakness.

GG is one of the biggest dogs in the big cap precious metas stocks areas as its still trading below its 2008 low.

What these PM stocks above show is that there are some bright spots within a sea of mediocrity. The leaders will lead the way as they always do and the rest will move when their time is right. I know it feels like one needs to be fully invested but there are going to be many new buy signals when we see the top rails of those 2016 trading ranges begin to give-way. If one is a long term investor then you can sit tight but for most of us mere mortals sitting tight can be very difficult when we see our profits slowly slipping away. I think the name of the game right now is patience and let some of the PM stocks that have had a strong run out of the October low to consolidate those gains. There is nothing I can see right now that calls into question that the next leg up in the bull market that began late last year is in trouble. All the best…Rambus

Below is the combo chart which has the HUI on top, the UUP in the middle and GLD on the bottom. Everything looks fine.

The GDX daily chart shows a nice breakout and backtest to the top rail of the bullish rising wedge and now the door is open for a move higher.

Below is the weekly chart for the GDX which shows the breakout starting to gaining some  momentum.

Below is the weekly chart for the GDXJ which shows all systems go.

I will be out of the office this afternoon and probably won’t make it back before the close. It’s been a long time coming so enjoy this day as there will be many more to come. It’s just getting started.

Tonight I would like to show you a couple of long term charts for Silver that puts where silver is currently trading into perspective. We can look at the hourly charts or even the daily charts for the short term patterns, but if you really want know where a stock is relative to its history we need to look at the long term view. The more history a stock has the more relative the current price action is.

Lets start with a 16 year monthly chart for silver which seems like a long time but in the big picture it only shows us a small part of its history. The dominate chart pattern is the 2011 bear market downtrend channel which is almost perfectly parallel. I purposely left the top rail of the 2011 downtrend channel and the top rail of the 2016 triangle thin so you can see the critical area silver is now trading at, red circle. So far this month silver has traded as high as 15.95 which puts it right against the top rail of the 2011 bear market downtrend channel and the top rail of the 2016 triangle.

I have viewed the 2016 triangle as a halfway pattern to the downside for well over a year or so but with the price action hitting the top rail this month that completed the 5th reversal point which now puts the triangle in the reversal category. I can now take the question mark off of reversal point #5 and add it to the possible reversal point #6. All this means is that we now have 5 reversal points in place to create a reversal pattern if the bulls can punch through the top rail. If they can’t and silver begins to decline all the way down to the bottom rail then a consolidation pattern will be in the picture again. An odd number of reversal points creates a reversal pattern and an even number of reversal points creates a consolidation pattern. The bottom line right now is that we have a triangle reversal pattern in place until it is negated if silver trades backdown to the bottom rail.

This next chart shows you why the more history a stock has the better perspective one gets when it comes to really big chart patterns. This chart is one of the very first charts I ever  posted publicly back in the old days before Goldtent was born. There is a website named Gold Eagle where I posted this chart for the first time which was probably around the 2004 – 2005 timeframe. At the time I showed this massive 25 year H&S bottom that was building out that was showing some nice symmetry. The double neckline looks similar to the double necklines we’v been following on some of the US stock market indexes which I hope will give us the same results as this 25 year double neckline H&S bottom.

Note the blue bullish rising wedge which formed between the two necklines which gave silver the energy it needed to finally break free from 25 years of resistance. Neckline #2 also came in handy during the 2008 crash which gave me a place to look for initial support.

Our 2011 bear market downtrend channel doesn’t look so daunting when compared to the rest of this 50 year chart. As I mentioned earlier when we looked at the monthly chart above for silver that I was looking at the 2016 triangle to be a consolidation pattern to the downside until we just completed the 5th reversal point. As I’ve said so many times during this bear market, it’s now up to the bulls to take out the top rail of the 2011 bear market downtrend channel and the top rail of the 2016 triangle trading range. It is a trading range because neither the upper or lower trendline has been broken. We are close but no cigar just yet.

Sir Plunger will be doing the Weekend Report so stay tuned as his reports are always filled with a lot of history and well thought out objective analysis. Have a great weekend and all  the best…Rambus