Flag/Pennant patterns can be very rewarding, because the majority of the time, a breakout/breakdown is huge. Silver created this pattern and the tip off to its next big move was a breakdown of support in (OBV) On-Balance-Volume, which presented the case to short silver. (see post here)
The outcome of Silver breaking down from this flag/pennant pattern…Over a 30% decline in days!
CLICK ON CHART TO ENLARGE
Friday the “Power of the Pattern” was suggesting that Silver should find intermediate support at the $27 level. (see post here) This created the target of where to cover shorts….when attemtping to score on defense you short at resistance and you harvest at support. During this sizeable breakdown ZSL (inverse Silver ETF) gained over 80% in a weeks time.
Flag patterns can be very friendly to your portfolio…ZSL picked up more in a week than the 500 index has made in 10 years!
Barcelona…Thanks for the kind words. Per Silver, Friday I shared that support should come into play at $27, this was a price point to cover shorts.
I will post a piece on FCX later today, which happens to be on support. Dollar hit its 38% retracement level and then has backed off, now it is approaching support. This will be the king pin to the commodities trades!
Chris
Chris…I was most impressed and should I say grateful with your calls on the copper/FCX/dollar/SLW/Silver correlations recently. Do you think these have further to go or do you recommend covering shorts at this time or is there more downside to come in copper and silver?
Gary…Thanks for the kind words and viewership. I use have used Metastock software since the mid-1990’s and it has been part of the product since then. I believe many packages/services have ways to look at OBV. It is not the end all tool by any stretch.
Flags/pennants frustrate both the bulls and bears towards the end of the pattern and I like to see as the flag is about to end, are more buyers or sellers stepping forward. Most of the time OBV is NOT a key tool per decision making.
Advantage to the RSS feed? To my understanding this alerts people to when a new piece of Kimble BS hits the blog. 🙂
Thanks again for the great question,
Chris
Enjoy your posts.
Where can one find OBV charts?
What advantage to a RSS feed?
Regards,
Gary