Wednesday, February 16, 2011

Silver Bull in Wave 3 - Feb 16, 2011

Goombarh 33,  Feb 16th, 2011
Good Morning,
Just one chart to show where we are at in the Silver Bull.  Came across this quite accidentally when surveying my positions and watch list stocks.  The chart is of SIL, Silver miners ETF.
A longer time frame certainly improves the vision and perspective, doesn't it.  Sometimes one can not see the forest for the trees obscuring the view! 
This chart reminds me of Elliot Waves, where just impulse wave 1, 100% (double) move has occurred this fall and wave 2, a 50% correction has just ended on Jan 25th or so.  Then we are in the beginnings of Impulse wave 3, which as you students of Elliot may know, will be the most powerful and longest up wave.
The author has not seen this view of the charts anywhere recently, and so you the reader should treat this information as an early participant, to take advantage of this information.
What is this chart telling us...We are in the middle of a massive Silver Bull!

Where are we headed in this Silver Bull...well, wave three according to Elliot theory is expected to be 1 to 1.63 times the length of wave 1; this may take the SIL chart estimated $34 to $42 range or an estimated 41% to 75% gain from today's price

Does this work?....Yes, mostly, my experience is that Elliot is a pretty good predictor of value or stock price...within the accuracy range of 20% or so.

Can I apply the same info to my stock...Yes, you may be able to roughly translate the 41% to 75% move to your own Silver stock.  Of course your Silver stock will be different dependent upon the stock characteristics, but you now know and have the comfort that the portended trend is upwards for another 50% in the next half year or so.

The weakness of Elliott, in my experience, is that the time frames are not very finite...that is the dates for the peaks are uncertain.

What else is the chart telling us?
1.      Miners are leveraging the Silver metal itself; note the red trace is for SLV the Silver metal ETF.  Note that SIL leveraged upwards but did not leverage downward in the pullback, which just indicates the strength of this move, and continued bullishness from the market participants.
2.      Volume increase is up; bullish move.
3.      True Strength has bottomed and is moving up.
4.      Chaikin Money flow has bottomed and is moving up.

Is this infallible?....Of course this is fallible...this is the stock market ...which is an extension of our world...and anything is possible for the future.  There are no hard and fast future crystal ball predictions, just possible indications.

So position yourselves readers, the best is yet to come for Silver miners!

Until next time,
Marco G.

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