Best of the Week
Most Popular
1. Gold Final Warning: Here Are the Stunning Implications of Plunging Gold Price - P_Radomski_CFA
2.Fed Balance Sheet QE4EVER - Stock Market Trend Forecast Analysis - Nadeem_Walayat
3.UK House Prices, Immigration, and Population Growth Mega Trend Forecast - Part1 - Nadeem_Walayat
4.Gold and Silver Precious Metals Pot Pourri - Rambus_Chartology
5.The Exponential Stocks Bull Market - Nadeem_Walayat
6.Yield Curve Inversion and the Stock Market 2019 - Nadeem_Walayat
7.America's 30 Blocks of Holes - James_Quinn
8.US Presidential Cycle and Stock Market Trend 2019 - Nadeem_Walayat
9.Dear Stocks Bull Market: Happy 10 Year Anniversary! - Troy_Bombardia
10.Britain's Demographic Time Bomb Has Gone Off! - Nadeem_Walayat
Last 7 days
Stock Market Pause Should Extend - 21st April 19
Why Gold Has Been the Second Best Asset Class for the Last 20 Years - 21st April 19
Could Taxing the Rich Solve Income Inequality? - 21st April 19
Stock Market Euphoria Stunts Gold - 20th April 19
Is Political Partisanship Killing America? - 20th April 19
Trump - They Were All Lying - 20th April 19
The Global Economy Looks Disturbingly Like Japan Before Its “Lost Decade” - 19th April 19
Growing Bird of Paradise Strelitzia Plants, Pruning and Flower Guide Over 4 Years - 19th April 19
S&P 500’s Downward Reversal or Just Profit-Taking Action? - 18th April 19
US Stock Markets Setting Up For Increased Volatility - 18th April 19
Intel Corporation (INTC) Bullish Structure Favors More Upside - 18th April 19
Low New Zealand Inflation Rate Increases Chance of a Rate Cut - 18th April 19
Online Grocery Shopping Will Go Mainstream as Soon as This Year - 17th April 19
America Dancing On The Crumbling Precipice - 17th April 19
Watch The Financial Sector For The Next Stock Market Topping Pattern - 17th April 19
How Central Bank Gold Buying is Undermining the US Dollar - 17th April 19
Income-Generating Business - 17th April 19
INSOMNIA 64 Birmingham NEC Car Parking Info - 17th April 19
Trump May Regret His Fed Takeover Attempt - 16th April 19
Downside Risk in Gold & Gold Stocks - 16th April 19
Stock Market Melt-Up or Roll Over?…A Look At Two Scenarios - 16th April 19
Is the Stock Market Making a Head and Shoulders Topping Pattern? - 16th April 19
Will Powell’s Dovish Turn Support Gold? - 15th April 19
If History Is Any Indication, Stocks Should Rally Until the Fall of 2020 - 15th April 19
Stocks Get Closer to Last Year’s Record High - 15th April 19
Oil Price May Be Setup For A Move Back to $50 - 15th April 19
Stock Market Ready For A Pause! - 15th April 19
Shopping for Bargain Souvenirs in Fethiye Tuesday Market - Turkey Holidays 2019 - 15th April 19
From US-Sino Talks to New Trade Wars, Weakening Global Economic Prospects - 14th April 19
Stock Market Indexes Race For The New All-Time High - 14th April 19
Why Gold Price Will “Just Explode… in the Blink of an Eye” - 14th April 19

Market Oracle FREE Newsletter

Top 10 AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

Elliott Wave Theory Suggests Bearish Outlook for Silver

Commodities / Gold & Silver 2009 Aug 10, 2009 - 05:24 AM GMT

By: Alistair_Gilbert

Commodities

Best Financial Markets Analysis ArticleSilver was decimated in last year’s market rout falling by over 80% in just seven months. Part of the reason is that it is not just bought for investment or jewellery purposes but is an industrial metal as well. Most people think of its industrial use in photography, but in fact it has myriad uses in the medical field because of its antibacterial qualities and more recently in creating superfibres for the clothing industry.


Polyester starts life as grain alcohol and, flowing over silver, is converted into ethylene oxide, the man-made fibre’s building block. Warm polyester fibre clothing -- which in the coldest weather wicks moisture away to keep the wearer dry -- is sweeping the outdoor clothing industry. It’s uses in electronics are well known as it is one of the best conductors of electricity. Many of you may already own American Silver Eagles.

Since their introduction in 1986, American Eagles have become a leading silver bullion coin investment product with more than 180 million one-ounce coins sold.

Yet despite the fact that much of the silver used is recycled again, it has been running a mining deficit for 15 years now. That means that global consumption has exceeded that mined for the last 15 years. So why has the price not exploded? I think it soon will. Silver’s Bull market started in 2001 when it bottomed at $4.04 and at its peak last year it hit $21.35. That is a rise of 528% in seven years. I think that it will do that again in the next seven years. If we look at the quarterly chart below, we have only completed Major Wave 1 (and probably seen the low point of Major

Wave 2.) We still have the biggest waves ahead of us! If you look at the DMI indicator, it is showing us that we are in a Bull market when the blue line is above the red line. Despite last year’s precipitous fall, it never crossed below the red line. The Stochastic is rising and has plenty more upside, but first, look at the DELTA candles. They are still red and that is warning us that first we must complete the “C” wave of major Wave 2 and that will probably take us down into early October.

If we move down to the Monthly chart, we can see that the DELTA LTD points very accurately call the highs and lows of the market. We are currently heading up to LTD 4 due in February 2010. This is reflected

In the MACD histogram which has just moved positive but the more sensitive Stochastic is firmly pointing down in a rising market, warning us of the imminent correction.

Moving on to the weekly chart, we can see that the Medium 5 is due (and is probably in) and whilst the Stochastic remains positive, the MACD histogram has failed to rise above 0 despite a 250 point rise in silver and this has bearish implications for the weeks ahead

This is one of my most interesting finds in the Cycle work that I have done this last week. There is an 118 week Cycle and each time it has occurred at the top of a major “B” wave pinpointing the start of the “C” wave down. On each occasion the “A” was the largest wave!

Moving on to my next Cycle, we have a 46 week Cycle high due this week, which may have happened a few days ago, but it ties in with the

top of Wave 2 of C. It is also worth noting that we are just completing the right shoulder of a Head & Shoulders top which projects down to about $8 which fits in with the $8.27 projection whereby Wave C = 61.8% of Wave A. However, because the right shoulder is higher than the left shoulder, this has bullish implications, and we know from DELTA that the bigger move is up into LTD 4 in February 2010, so we may get the C wave making a slightly shallower correction and the turn coming slightly earlier than the 61.8% in TIME.

I will keep you informed as the waves unfold and try and pinpoint the end of C. The main thing is that it looks like the top of Wave 2 of C was in on Thursday at $15.03 so traders should be looking for a sharp correction here in Wave 3 down.

By Alistair Gilbert

www.alistairgilbert.com

ALISTAIR GILBERT has worked in the markets for over 30 years. He has worked as an institutional research analyst for a firm of stockbrokers where he got his grounding as a technical analyst. He has also worked as branch manager of a firm of stockbrokers managing private client portfolios and as a fund manager for a leading merchant bank. Alistair was also Managing Director of a Swiss Fund Management group with over $1 billion under management and developed the business extensively in the Middle East.

Alistair has now returned to his native England where he now specialises in TIME and PRICE analysis utilising Elliott Wave, DELTA and a range of technical indicators. I can be contacted via alistair@alistairgilbert.com

Disclaimer: The ideas expressed in this Report are the thoughts of Alistair Gilbert and represent part of the intricate process that he goes through before arriving at a trading decision and as such are like a trading diary. Alistair Gilbert is not an authorised investment adviser and as such none of his statements should be construed as investment advice. The value of investments can go up as well as down and trading is very high risk. Readers are advised to consult with their own investment advisers who may be better qualified to offer a trading strategy based on your own individual circumstances.

Alistair Gilbert Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules