Don’t you have the feeling sometimes that something is brewing, that there’s something in the air? Kind of joyful excitement because you got some positive premonition? Because maybe you’re feeling the market that intensely so nothing can go wrong in trading? That’s the way I felt on Friday by stock closing time when I was scalping silver intensely. It just didn’t want to break through upwards, it fell back, it consolidated briefly, and after that it went back up in the direction to 27.40. The same thing happened again, but it simply didn’t want to break the 27.40. In order to prepare this issue of the GUNNER24 Forecasts I got to the bottom of that feeling. I wanted to know why I am that positive that in silver the next “Trade of the Year” is in the air:

In the 8 hour time frame a five candle impulse has formed. Even though I saw it through the whole Friday I didn’t think about it. Only the visible rebound of the last candle from the 2*1 Gann Angle was obvious for me. That’s why by the end of Friday trading at the little consolidation stages you could go long again and again without a risk. The rebound energy of the last candle was clear. Silver wanted to go up.

This is what attracted my attention not before the weekend: The enormously explosive brew that surged with the formed highs of the candles # 5, 6, 7 and 8. The highs are following the blue arc downwards. That initial impulse is under great suspense, such a connection is extremely seldom showing the will of the market to break through upwards. The consolidation of the highs is not too low. That’s another sign of strength. From my sight the market will break upwards being able to reach at least the 3rd double arc at 31.55 in the further course until December.

The first sign for longs is to be expected by stock opening. In the candle count, a quoted price of more than 27.40 would suggest the anticipation of the next important high at the 13th candle in the 8 hour time frame. The long entry should follow if one of the next candles will have broken the blue arc or the first square on closing price basis. (Free GUNNER24 Trading Manual V 1.3: Trading rules 1.5 and 1.6). An up gap at stock opening should cause a re-test of the upper horizontal of the first square at 27.40, anything else would be unwholesome for the further rise.

The actual weekly GUNNER24 Setup shows a strong signal, too… well, rather a monster:

The week close is lying above the setup-anchored Gann Angle again. That one was re-conquered after not having resisted the week before last. It’s an extremely strong sign. The highest week close for 30 years. The new energy for the price rise was produced by the test of the price and time magnet, the lower line of the 4th double arc. The sparkling rebound energy is shown by the lower wick of the week candle. The chart-anchored resistance horizontal is lying above the price at 27.50. That is still braking the return to the 5th double arc. The primary Gann Angle is braking the price rise the same way, still retaining the silver. But since we assume a break out its condition should change next week from being a resistance Gann Angle to becoming a support Gann Angle which should give support on daily basis. A test of that Gann Angle is conceivable after the 5th double arc has been reached and silver should rebound from it on daily or hourly basis. You see, I reckon on high volatility for next week, too!

The third pending possible long sign and the icing on the cake:

In the one hour time frame a classical Cup with handle has formed. In the upwards trend a Cup with handle pattern is a continuation pattern. I’ve seen more perfect proportions in terms of the cup shaping. But the more promising is the handle. It’s rather horizontally aligned. From my experience that is more promising than a handle that is directed downwards. Furthermore the handle retraced the move from B to A by a 38% only. The most perfect Fibonacci retracement for this formation!

The Cup with handle is to be traded a little tricky. Above all if the pullback of the handle after a breakout is concerned. Consider therefore the link to the trading tactics. Further I recommend your reflecting that the minimum target is not always reached, especially talking about the lower time frames. But it’s still interesting that in the 8 hour time frame of the 5 Candle GUNNER24 Up Setup presented above the 29.80 are corresponding with the interim target, the 2nd double arc.

Today just a brief glance to the gold:

Silver’s big brother Gold had a rather sluggish week, it won’t be able to escape from the probable silver breakout. In the weekly 5 Candle GUNNER24 Up we see that the primary Gann Angle was tested successfully for the third time with the Thursday low at 1329. But the rebound energy is far from being as strong as in the case of silver, the week even proceeded negatively. In spite of all, in the 8 hour time frame gold has formed a promising initial impulse. It comprises 8 candles. In case of a break out of the first square on Monday target will be 1371 (first double arc) and in the further course of the week it will be the 2nd double arc at 1388, pretty near the weekly target. If gold goes on consolidating for one or two more days (Monday/Tuesday) we will have to consider the primary Gann Angle to see whether a new test at about 1345 is retraced again. It would be the forth and thus pointing the way.

US stock markets:

From the statistic point of view, the stock markets should perform above average, because of Thanksgiving Day week. For the last 37 years, with almost a 73% the S&P 500 has shown a positive weekly performance in the respective Thanksgiving Day weeks. All in all the markets performed just like prognosticated in the last issue. The corrections were a little lower than they were foreseen. Nevertheless all the conditions are there continuously to make the year highs being marked within the next two weeks:

Only once I am dealing with the NASDAQ-100 today, for analysis. It explains best what the situation in the stock markets is looking like, otherwise it will be the first one to give the sign for the breakup… The Tuesday low was marked exactly at the setup-anchored support horizontal, the primary Gann Angle was not reached. Thursday and above all Friday were strong and the market closed again within the 4th double arc. Very positive! Visibly that 4th double arc has still great influence in the NASDAQ-100.

At the beginning of the correction (red arrow above) it still gave support at the upper line, and its comportment changed like this: After the break of the upper line the support was given by the lower line. After the break of that one on Tuesday the lower line was a resistance (green arrow). Thursday and Friday closed within the double arc again. Now the upper line newly became the resistance – recognizable at the Friday top (red arrow right). Actually, you can take advantage of such a situation by day trading only. There isn’t yet any long signal, it won’t be produced before the unambiguous break of the 4th double arc. Then the resistance diagonal would get involved. I think the gap will have to be closed before on Tuesday a breakout attempt can be started. I don’t believe it is a Runaway Gap. Maybe the primary Gann Angle will have to be touched to produce the necessary energy for the final break of the 4th arc.

All the comportment of this correction is to be assessed positively, just like all the corrections which in an up setup begin rather above a double arc, then following down the double arc. That’s a sign of a normal retracement in the upwards trend.


In the weekly 5 Candle GUNNER24 Up we make out that the market is jammed between the resistance diagonal and the upper line of the 2nd double arc (candle body). The long lower wick of the week candle and the closing price above the 2nd double arc are pointing unequivocally to a test of that 2nd double arc. Since no closing price was produced within the 2nd double arc the test seems to have proceeded successfully. The tendency of this time frame, too, is we may speculate on a breakout upwards and a resumption of the trend. Target continues being 2257 until March 2011. A break of the 4th double arc in the daily setup will produce the first long signal. We lift the SL to 2075. Even though it’s a little bit narrow but really no new low on daily basis should be produced. In case of the S&P 500 we lift the SL to 1167(MIT) in the weekly long positions – and to 10950(MIT) in the Dow Jones.

Be prepared!

Eduard Altmann

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