It now looks like silver has completed a classic 3-wave correction from its May highs, following its strong advance in the Spring. On its latest 6-month chart, we can see that it appears to be conforming to a classic Elliott wave pattern, which consists of 5 waves up in the direction of the primary trend, as numbered, followed by a 3-wave correction or reaction that, once complete, is followed by another series of up waves.
The correction phase is considered to be complete or very close to complete — while it could react back further short-term towards the support level shown in the vicinity of the 200-day moving average, which would not cause any technical damage — the overall pattern is strong and given that we will soon enter a seasonally favorable time of year for the precious metals, there is a good chance that it won't react back much further, if at all. Thursday's breach of support will have thrown some investors and triggered stops and may turn out to be the sort of "head fake" that frequently precedes a sizable advance.
The dynamic in play here is that "Big Money" whacks the price through a support level to trigger stops, and then they mop up the disgorged holdings ahead of renewed advance.
If this is what is going on, then it is, of course, very bullish.
So, whilst acknowledging the possibility of a little more downside in the short term, the main message here is that silver is now in buying territory again, with a major advance to a point way above the May highs on the horizon.
| Want to be the first to know about interesting Silver investment ideas? Sign up to receive the FREE Streetwise Reports' newsletter. | Subscribe |
Important Disclosures:
-
Statements and opinions expressed are the opinions of the author and not of Streetwise Reports, Street Smart, or their officers. The author is wholly responsible for the accuracy of the statements. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Any disclosures from the author can be found below. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
- This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.
For additional disclosures, please click here.
Clivemaund.com Disclosures
The above represents the opinion and analysis of Mr. Maund, based on data available to him, at the time of writing. Mr. Maund's opinions are his own, and are not a recommendation or an offer to buy or sell securities. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund's opinions on the market and stocks cannot be construed as a recommendation or solicitation to buy and sell securities.
