Investors: Understanding Where We Are In The Silver Bull Market (SLV, AGQ, ZSL, GLD)
Last August I told my subscribers to prepare for a monster rally in Silver (NYSE:SLV), which at the time of my forecast was $18.73 per ounce. I drew up a chart and predicted a huge rally to $29 an ounce, and we ended up at $31 or so just a few months later. This was entirely a crowd behavioral move that I foresaw in advance, based on patterns that R.N. Elliott developed in the 1920’s and 1930’s. My theory was besides the crowd pattern (a 20 month odd Triangle consolidation), that investor’s would begin to view Silver as “Poor man’s Gold” and buy it. Literally, the idea is as simple as investors will simply think that “Gold is too expensive, but silver is cheap”. That is the explosion power that is behind this move from $19 to $50 an ounce since late August 2010.
Below is the original chart I sent to my subscribers outlining this triangle pattern and the likely move:
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After Silver ran hard and fast, it left a lot of talking heads on CNBC and everywhere else scratching their heads and wondering what just happened. If you learn and understand the basics of Elliott Wave Theory, you can begin to foresee what is about to happen and stop scratching your head all the time. Watching the analysts on CNBC is like watching the Monday morning quarterbacks following an NFL Sunday. After that massive silver run from $18 to $31, it was time for a correction and I called for $25 to $26.50 as likely in a normal pessimistic crowd wave 2 pattern down. Once that completed, I sent my subscribers the chart below outlining another Bull wave to $39-$45 per ounce:
Silver then eventually ran to $45 per ounce in April of 2011 and had a brief spike to near $50 to test the all time highs just in the past week or so. The action has been wild since then, because after a wave pattern from $18 to $31, then back to $26, then up to $47… the crowd will begin to turn mildly pessimistic in a current “wave 4 “ correction pattern. This is when you will begin to hear excuses for Silver dropping, including believe it or not blamed on the death of Osama Bin Laden. In truth, whatever happens near term to explain the current correction in Silver is simply Monday morning quarterbacking. Using the current days headlines to explain the action that I already know is coming. Other excuses are the change in margin requirements on silver contracts and the squaring of positions at end of month etc.
I expect Silver to correct to the 40 to $42.75 areas based on my Fibonacci work and Elliott Wave views, and after this 4th wave consolidation we will see a surge to as high as $60 per ounce. Any pullbacks in Silver should be bought here and same with the Silver stocks post haste. Below is my latest chart forecast on Silver:
If you would like to stop scratching your head, get more comfortable where the markets are heading in both Gold (NYSE:GLD), Silver (NYSE:SLV), S&P 500 (NYSE:SPY) etc in advance, then take a look at http://www.markettrendforecast.com/, and take advantage of a 24 hour coupon special to subscribe, or just sign up for the occasional but not always timely free updates. Our subscribers learn and earn!
Related Tickers: iShares Silver Trust (NYSE:SLV), ProShares UltraShort Silver (NYSE:ZSL), Sprott Physical Silver Trust (NYSE:PSLV), ProShares Ultra Silver (NYSE:AGQ), ETFS Physical Silver Shares (NYSE:SIVR), PowerShares DB Silver (NYSE:DBS), Global X Silver Miners ETF (NYSE:SIL).
Written By David A. Banister From The Market Trend Forecast
David Banister – We believe that markets move largely based on important swings in sentiment, crowd behavioral patterns, Fibonacci Re-tracements, Cycles, and other ephemeral catalysts. The headlines explain what just happened in the market, but they do not predict the next moves up or down in the indices, sectors, or commodities. As an investor, you need to be armed with tools in advance of major moves that are accurate, and TMTF will assist you in being prepared as an investor for volatile markets both on the upside and downside. We have a wealth of technical analysis experience to take advantage of the crowd behavior in the markets. Our Chief Strategist, David Banister, has been quoted and or written articles on CBS Marketwatch.com, 321gold.com, TheStreet.Com, SafeHaven.com, Kitco.com, Stockhouse.com, Theaureport.com, along with other well known investment sites. David has been a past guest on the national radio show “Money Matter$”. Chris Vermeulen of Thegoldandoilguy.com met David in 2008 as the financial crisis was unfolding. After numerous months of following the forecasts and trading abilities of Mr. Banister, Chris suggested that a joint venture be formed and we offer a trading service to a finite and select group of partners (subscribers). ActiveTradingPartners.Com was formed in July of 2009, and with the success of that service, we now launch The Market Trend Forecast in March of 2010.
Pls send me your newsleter, I only have slv, and I would really like to have some idea of its potential. It is my only investment that I could afford.
Clearly he was wrong and is probably monday morning quarter backing himself. how was he so right on the previous moves, but yet calls for a pull back to 42. We are now hovering around $ 32. Anyone who claims to “predict” the markets loses my trust immediately.
Alby what supply demand charts are you looking at? Contracts are devoured immediately. Once the JPM suppression game is done, the fundamentals are going to send the metals in a giant uptick. It will most likely be hard and fast, and nobody will know what happened. Better start your tranche buying now because this thing is poised for lift off.
@Alby
Anything on gold?
Another Chart Monkey prediction that hypes based on speculation. Silvers next level is $20/oz. Back in line with supply/demand metrics.