Key Concepts
- Technical Analysis: Identifying support and resistance levels based on price action.
- Support & Resistance: Price levels where the price tends to stop and reverse direction.
- Wedge Pattern: A chart pattern suggesting a potential breakout or breakdown.
- Bare Flag Pattern: A bearish continuation pattern indicating potential downside movement.
- Micro, Midterm, & Long-Term Patterns: Analyzing price movements across different timeframes.
- Probability-Based Trading: Recognizing that trading outcomes are not certain, but can be assessed based on probabilities.
- Fiat Currency & Dollarization: The impact of currency strength and potential shifts in global financial systems on precious metals.
- Doji Candle: A candlestick pattern indicating indecision in the market, often signaling a potential reversal.
- Trend Line: A line connecting a series of highs or lows to identify the direction of a trend.
Silver Analysis: Navigating Support, Resistance, and Patterns
Gareth Soloway begins by analyzing silver’s current price action, highlighting a 3% increase at the time of recording. He emphasizes a chart-based, probability-driven approach, dismissing reliance on complex indicators.
Support & Resistance Levels: The primary support level for silver is identified between $70 and $71 per ounce. This is based on observing previous price consolidation and bounce points. Resistance is pinpointed between $91 and $92 per ounce, similarly derived from prior price stagnation and failed upward attempts. Soloway stresses the importance of identifying these levels by observing price action – a skill replicable across various markets (stocks, crypto, oil, etc.). He notes the “value in the education” of demonstrating how these levels are found, rather than simply stating them.
Micro Wedge Pattern: A short-term “micro” wedge pattern is identified within the larger silver chart. The breakout from this wedge on Friday, continuing into Monday, suggests a near-term upward move, but Soloway cautions that this doesn’t guarantee a surge to all-time highs. He clarifies the concept of moves within moves, differentiating between micro (days), midterm (weeks), and long-term (months) patterns.
Probability & Risk Management: Soloway repeatedly stresses that trading is based on probabilities, not certainties. He draws an analogy to a casino, aiming to establish odds in his favor for consistent profitability, acknowledging that losses are inevitable. He emphasizes the importance of avoiding emotional decision-making, particularly in response to social media hype.
Bare Flag Pattern & Midterm Bearish Outlook: Despite the short-term bullish signal from the wedge breakout, Soloway identifies a larger bare flag pattern forming on the silver chart. This pattern suggests a potential downside move. He explains that the bare flag is a bearish continuation pattern, meaning it indicates the existing downtrend is likely to resume. If the price fails to break above the $91-$92 resistance, a decline to the $54-$50 range is anticipated. This level is significant as it aligns with highs from 1979/1980 and 2011. He states he would be accumulating silver at this lower level.
Long-Term Bullish Perspective: Soloway maintains a long-term bullish outlook on silver, driven by concerns about fiat currencies and the slow process of de-dollarization. He points to the US debt and newly imposed tariffs as contributing factors to this long-term bullishness.
Gold Analysis: Breaking Resistance and Potential Upside
The analysis then shifts to gold, which Soloway notes has broken above near-term resistance at the $2100 level. However, he emphasizes the need for a daily close confirming this breakout before becoming overly optimistic.
Identifying Resistance & Support: The $2100 resistance level was identified based on a previous “dogei” candle (a candlestick pattern indicating indecision and potential reversal) and consolidation around that price point. Support is identified around the previous high pivot point, with a potential trend line forming. A break below this trend line could lead to a retest of the $1940-$1950 support level.
Potential Targets: If the breakout at $2100 is confirmed, the next target is $2400. A further break above that could lead to all-time highs around $2600. Soloway highlights that gold’s chart currently presents a stronger bullish signal than silver’s.
Connecting the Ideas & Overall Synthesis
Soloway’s analysis demonstrates a layered approach to technical analysis, combining short-term micro patterns with midterm and long-term trends. He consistently emphasizes the importance of understanding probabilities and managing risk. While acknowledging short-term bullish signals in both silver and gold, he cautions against overconfidence, particularly in silver, where a bearish midterm pattern is dominant.
The overarching theme is the interplay between short-term price action and broader macroeconomic concerns. The long-term bullish outlook for both metals is rooted in concerns about fiat currency devaluation and geopolitical uncertainty, particularly regarding tariffs and the US debt. Soloway’s framework provides a practical, chart-based approach to navigating these complex market dynamics, emphasizing the need for a disciplined, probability-focused mindset. He concludes by reiterating his commitment to providing ongoing updates and analysis based on chart observations and probability assessments.
Notable Quote:
“Everything I do is all in probabilities. There's no certainties. I wish, well, trust me, I’d be literally equal to Elon Musk in terms of of wealth if it was certainties and I could do this in in terms of certainties, right? It just doesn't work that way. It's probability.” – Gareth Soloway.
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