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Politics : Stockman Scott's Political Debate Porch

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To: Jim Willie CB who wrote (6112)	9/11/2002 6:00:11 PM
From: pogbull	of 89467

Silver futures coiling within the bowl By Clif Droke September 6 2002 kitco.com Critical underlying support: $4.47 Critical overhead resistance: $4.60 A picture is said to be worth a thousand words. With that in mind, take a look at the picture December silver futures presents in the chart below. From this picture we can grasp not only silver's critical near-term parameters and potential breakout levels, but we also get a good view of what the current supply/demand balance looks like. From this chart of silver's daily prices there are three conspicuous features worth noting. The first is a steep parabolic bowl that can be drawn from the July highs down to the August lows and back up through September. We note with interest that silver bottomed at the precise mid-point, or "vertex," of this parabola in August (at about $4.40) and have kept within the confines of the bowl since then. As long as the rim of this bowl isn't violated (currently at around $4.47) the set-up for an upside resolution of its recent consolidation remains intact. Secondly, note the small symmetrical triangle pattern that started forming in mid-August and is coiling toward the "apex" of the triangle at present. Keeping above $4.50 (the immediate lower boundary of the triangle) keeps prices firm for a potential upside breakout. Thirdly, note the descending line of supply (i.e., trendline) that stretches from the July highs down through September and currently intersects $4.60-$4.62. This must be considered as the confirmation level of an attempted upside breakout from the triangle. While this line of supply is providing a lot of overhead pressure right now, there is a good chance it will be overcome this month considering the bullish implication of the bowl and triangle patterns and the bullish seasonal implication of the September-October timeframe. Again, breaking below $4.50 and then $4.47 would eliminate the bullish potential of this chart pattern set-up and would pave the way for a test of this year's lows and possibly to lower lows. But breaking above $4.60 would almost certainly lead to a fast and furious ascent to higher levels, most likely to at least $4.80-$4.90 before further resistance is encountered.

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