Silver ETF Degree Days

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This chart displays the daily progress of the Silver ETF with important degree days indicated. For Silver I have decided not to use Mercury as was the case with the GBP/USD. There are fewer subdivisions within the price of Silver so a planet with a slower heliocentric orbit is needed.

Silver met a major low when Venus was at 300 degrees heliocentric longitude. A full rotation from the low brings us back to Venus at 300 degrees. With this in mind, I have highlighted the dates of when Venus completed rotations of 360 and 720 degrees from the low. These dates marked important turning points for Silver and they share price characteristics. It is well known that Gann believed history repeats itself. It is my conclusion that this evidence of repetition is what Gann was referring to.

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The first decline from the 300 degree day was $3.51 (high to low). The initial rally which occurred from 360 degrees was $2.53

The second decline from the 300 degree day was $3.55 (close to close). The initial rally which has occurred from 330 degrees is thus far $2.4

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If this pattern of repetition was to continue, then the forecast resulting from this analysis would surely go against my previous bearish interpretation. The repetition of the past scenario would indicate that there is going to be short term weakness in Silver. Price is expected to drop leading up to a March 16th Bullish Reversal. The rally from March 16, 2010 would result in a new 52 week high by April 2, 2010. A trading strategy of "Protected Shortsell" could be implimented until bullish scenario is eliminated. Short the stock + Buy April Call.

My argument against the repetition scenario results from the recent occurrence of other planetary degree days. In this chart we can also see that Jupiter completed a 30 degree rotation during the entire time that it took for Silver to make its upward journey. Although Jupiter's degree days did not occur exactly at the low or high, it is obvious that those days encompass 99% of the Silver rally. I am trading with the belief that the recent Jupiter degree day marked a major turning point for silver. The decline in Silver is expected to continue until the next the next Jupiter degree day of November 9, 2010. Since price tends to reverse on these degree days, a decline into one indicates price rally, and a rally into a degree day indicates price decline. For the bearish forecast to remain strong, I am looking for price to remain sideways to slightly higher until March 16 and possibly reach my second cluster target of 17.74-17.98.

For the previous Silver chart visit www.1618analytics.blogspot.com