SLV - Silver ETF - Time Cycle & Fibonacci Retracement Analysis

Ruben T. Varela
Oct 17, 2007

Time Cycle Analysis
Taking a look at Time Cycle Analysis, I want to start my time measurement right at the launch of the Oct-03 "Impulsive Phase" - capturing just the explosive parabolic rally, and none of the preceding consolidation.  The second green line is placed at the launch of the last Sept-05 "Impulsive Phase".  The third green line is equidistant so it draws itself.
 
SLV - Weekly - Time Cycle Analysis

If Silver has entered into a new "Impulsive Phase", then support between the 10-week and 40-week EMA should hold.  After that, all selloffs during the Impulsive Phase should bounce at the 10-week EMA and not approach the 40-week EMA.
 
Please note the MACD indicator in the above chart is nowhere near "oversold" areas, signifying plenty of room for higher prices.  Please also note Silver's recent breakout of a Bullish Flag pattern [red parallel lines].  Bullish flags are considered "continuation" patterns within the longer term trend and denote "accumulation".  Conventional trading wisdom says "Flags fly at half mast", so an "Impulsive Phase" target for Silver is about $25 over the next 9-12 months.
 
Fibonacci Retracement Study
 
SLV - Weekly - Fibonacci Retracement

Ruben T. Varela
email: rvarela@socal.rr.com

Ruben Varela is an independent trader. Ruben attended California State University - Long Beach, majoring in Economics and Information Systems. After a successful 15-year career in commercial and investment real estate, Ruben's trading success led him to retire from real estate in January 2006 in order to trade full time. Ruben is presently in the process of launching a website [www.thegoldenbull.net, not live yet] focusing on trading the Precious Metals sector. Look for the website launch and additional insight from Ruben in the coming weeks. In the interim, please feel free to contact Ruben at: rvarela@socal.rr.com.

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