Precious Metals: What IF This has all been one Giant Half Way Pattern?

By: Rambus Chartology | Sun, Aug 18, 2013
Print Email

Editors Note: Last Weekend report, Rambus Showed a Provocative Scenario For the Precious Metals Markets dubbed "What If 1: Circa 2013." This Scenario was based on a comprehensive and rather complex analysis of the Chartology of the Precious Metals: http://rambus1.com/?p=15405

This Weekend Report (actually Published for Members Wednesday Evening) Has quite a different, perhaps even more provocative postulation. At this point Both of these What If Scenarios are Viable. Here is "What If 2 : circa 2013"

 


Tonight I would like to show you two stocks we bought, one yesterday and one today, that have nice inverse H&S bases. H&S patterns are generally reversal patterns that show up at the end of a move and in my book one of the more reliable chart patterns. They can also show up as a consolidation or continuation pattern but to a much lesser degree. Whenever I'm looking for a bottom I always look for a H&S or double bottom first as those two patterns usually show up there. There can also be a 5 point triangle, 5 point rectangle or 5 point falling wedge, but the most common reversal pattern is the H&S.

Lets start with AG that we bought yesterday which has a double bottom head, black dashed horizontal line, at the double bottom hump, and a left and right shoulders. We jumped the gun a bit yesterday but the pattern was too pretty to ignore. By pretty I mean the symmetry is beautiful. Note the H&S neckline symmetry rail that is a parallel neckline that measured the bottom of the right shoulder. The very nice double bottom that created two heads. It is just a very nice looking inverse H&S bottom.

First Majestic Silver Daily Chart
Larger Image

At the forum today I wrote a post to one of our subscribers telling him I was finding a lot of these types of bottoms in the precious metals stocks on the short term daily charts. I also said where these smaller inverse H&S bottoms were forming, on the longer term charts, maybe giving me some clues that this could be a very important bottom that is being made in the precious metals stocks. Remember it wasn't until last Thursday that these right shoulders started to form so before last Thursday there were no H&S bottoms.

This is still a work in progress as I still have a lot of precious metals stocks to review yet but there are some promising chart patterns that are beginning to shape up for the big picture. As I told Sir Fully last night don't get too excited yet as there is alot more work to do for these stocks to mature to their full potential. AG is a perfect example of what I'm seeing in some of the precious metals stocks that are giving me some hope this could be a very important bottom we are seeing right here. As I have shown you many times in the past, bigger chart patterns can be made up of smaller pattern, that create the final formation. In very large patterns the reversal points can and usually are made up of some type of smaller reversal pattern, such as a H&S or double top or bottom. Keep in mind the inverse H&S bottom, on the chart above, as it plays a big role in the long term weekly look below. Our current H&S bottom is the 6th reversal point in a very large 6 point, flat top triangle consolidation pattern. Notice I said consolidation pattern. These types of consolidation patterns are harder to pick up in real time because they keep making a lower low on the bottom rail. When you look at this weekly chart for AG the picture should be very clear to you of the potential for our current inverse H&S bottom to be the possible 6th reversal point in a very large consolidation pattern. Please keep in mind the 6th reversal point won't be complete until it touches the top rail of the flat top triangle. Also this is a very large pattern so the price action will take time to reach its full potential. If this is a consolidation pattern it will be a very big deal as I will view the flat top triangle as a halfway pattern.

First Majestic Silver Weekly Chart
Larger Image

Below is another example of what I'm seeing when I look under the hood of the precious metals stock indexes. I've labeled all the reversal points on all the chart patterns so you can see what I mean when I talk about reversal patterns. In an uptrend the first reversal point will start at the first high and in a downtrend the first reversal point will always start at the first low. SLW is considered one of the better precious metals stocks to own during a bull market because of its leverage to the price of silver. Here you can see an unbalanced inverse H&S bottom that isn't quite as pretty as AG, but it is still a valid reversal pattern. As you can see it had a nice breakout gap on Monday. There is still a possibility of a backtest to the neckline before the rally really gets going.

Silver Wheaton Daily Chart
Larger Image

The long term weekly chart shows a similar setup that AG has only SLW has a bullish expanding falling wedge consolidation pattern. Notice where our inverse H&S bottom is located, reversal point #4, that I showed you on the daily chart above. I can't tell you how important this potential bottom is in the overall big picture. WHAT IF, this is a consolidation pattern to the upside? I will let you use your imagination. Like I mentioned earlier this is still a work in progress but I have about 8 precious metals stocks that have a similar setup. As always we will follow the price action and see where it leads us. There is still a lot of work to do to make this possibility a reality but we do have something to guide us for as long as the picture stays clear. All the best...Rambus

Silver Wheaton Weekly Chart
Larger Image

So Now we have 2 Very Different medium to long term scenarios embedded in the Chartology of the Precious Metals Complex.

Stay tuned as these scenarios continue to unfold.

 


 

Rambus Chartology

Author: Rambus Chartology

Rambus
Rambus Chartology

Rambus Chartology is Primarily a Goldbug TA Site where you can watch Rambus follow the markets on a daily basis and learn a great deal of Hands on Chartology from Rambus Tutorials and Question and Answers.

Most Members are Staunch Goldbugs who have seen Rambus in action from the 2007 to 2008 period at www.goldtent.org and now Here at Rambus Chartology since early 2012.

To review his Work and incredible calls from the 2007-2008 period click on the top right sidebar in the "Wizard of Rambus” ..."What If !!" Post

To Follow Rambus Unique Unbiased Chart Work and participate in a Chartology Form with questions and answeres and learn the Art and Science and Mindset of a Pro Trader please Join us by subscribing monthly at www.rambus1.com

You will find Rambus to be a calm humble down home country tutor with an incredible repitoir of all the TA based protocols tempered with his own one of a kind style...simply put...He wants to keep his subscribers on the right side of these crazy volatile and downright dangerous markets

Disclaimer

IMPORTANT RISK DISCLOSURE This site has been prepared solely for information purposes, and is not an offer to buy or sell or a solicitation of an offer to buy or sell any security or instrument or to participate in any particular trading strategy. The information presented in this site is for general information purposes only. Although every attempt has been made to assure accuracy, we assume no responsibility for errors or omissions. Examples are provided for illustrative purposes only and should not be construed as investment advice or strategy. The information presented herein has not been designed to meet the rigorous standards set by the Commodity Futures Trading Commission for disclosure statements concerning the risks involved in trading futures or options on futures. That disclosure statement must be provided to you by your broker. The materials in this site do not attempt to describe the risks to investors that may be associated with the way trading is conducted in any particular options market or in any market for an underlying or related interest. In the preparation of this site, every effort has been made to offer the most current, correct and clearly expressed information possible. Nonetheless, inadvertent errors can occur and applicable laws, rules, and regulations often change. Further, the information contained herein is intended to afford general guidelines on matters of interest, and to serve solely as an introduction to our financial services. Accordingly, the information in this site is not intended to serve as legal, accounting, or tax advice. Users are encouraged to consult with professional advisors for advice concerning specific matters before making any decision impacting on these matters. This site disclaims any responsibility for losses incurred for market positions taken by members or clients in their individual cases, or for any misunderstanding on the part of any users of this website. This site shall not be liable for any indirect incidental, special or consequential damages, and in no event will this site be held liable for any of the products or services offered through this website. By accessing or otherwise using this website, you are deemed to have read, understood and accepted this disclaimer.

Copyright © 2012-2017 Rambus

All Images, XHTML Renderings, and Source Code Copyright © Safehaven.com