Disclaimer: This is posted purely for interest in technical analysis techniques, and should not be used as a basis to make financial decisions.
The previous forecast for Zinc was invalidated when a strong drive occurred towards the end of the cycle (15 April target). The recent price action finding SUPPORT at a HIGHER LOW near the 15th April may well be very bullish, and suggest a very short sharp bullish drive. (Yup, I got the long term forecast WRONG – looked good following the pattern for quite a while till it decided to rally UP, and not capitulate DOWN).
This kind of premature termination in the price action with cycles has happened before. I have been studying these in many markets and different eras for quite a while now, and have built a range of caveats for determining trading probabilities. This pattern indicates a fast move UP, usually into a key time increment and price level. In the chart below I have projected key times and prices using a standard method.
My primary thinking in probability here is a strong drive UP into the price increments I have listed on the right hand side of the chart into 21 May in a blow off kind of move. The key is for multiple higher lows, and the lows around the 15th April should not be broken (although it is possible for this to happen in an exhaustive pattern down, then a strong bullish move to eventuate, but less likely – depends on the pattern).
Typically with this kind of (McLaren) “Jamming up” move after a strong bearish counter trend to the bullish drive in the weekly chart results in a fast exhaustive bullish move up of some kind, and then a retest of the lows once a high is made usually below the major high (my primary suspicion is a retest to find support on the 20 July).
The idea is this may be a response to the struggling bearish move down which failed to obtain a capitulation style bearish exhaustion, which may yield a sudden sharp optimistic bullish move which quickly exhausts (suspect 21 May, or less likely 02 June +/- 1 trading day), retests the lows, then bases in order to resume the secular bullish drive.
This assumes the secular commodity bull will be long enough and strong enough in Zinc to sustain a retest of the high, and a subsequent bullish drive above these highs.
However I have been pioneering a multi-harmonic cycle method that I do see in evidence here, but won’t at this point muddy the water by complicating what I’m seeing (I may post another version of the chart with the harmonic time/price points for interest, but would prefer to keep this post as simple as possible).
In sum, provided the higher low holds, I can see the highest probability scenario currently of Zinc driving strongly into one of the price increments listed around 21 May. Depending on how it trades into this time point will tell a lot about how Zinc may move post this time – either a retest of the lows to find support around 20 July, or a bullish continuation into a new major high of some sort.
Regards
Magdoran
(Please note: All time points are typically +/- 1 trading day, but can be as much as 2 trading days from the time point in price action, and +/- 4 calendar days for cycle completions is not unusual).