Tracking Silver Elliott Waves: Major III Intermediate 3

Using the methods explained in "Alf Field and Silver Elliott Waves," I am going to attempt to track what I believe is silver's wave III-3. I believe this new wave began on 29 December 2011, and I believe an approximate target for the end of this wave is US$234.78 for silver. The entirety of III-3 is expected to take two to three years. Thus, wave III-3-i should complete in perhaps 8-10 months. And so Wave III-3-i-(1) is likely to take about 2-3 months, but a longer wave is possible.

It is likely that wave counts will have to be retroactively modified as the larger picture becomes more clear. The main reason is that clear -8% corrections may not occur before a larger -13% correction.

Possible current wave
-3. 26.15 to ?
--i. 26.15 to ?
---(1). 26.15 to 37.50 (+43.4%)
----(i). 26.15 to 29.73 (+13.69%)
----(ii). 29.73 to 28.53 (-4.04%)
----(iii). 28.53 to 34.51 (+20.96%)
----(iv). 34.51 to 32.64 (-5.42%)
----(v). 32.64 to 37.50 (+14.89%)
---(2). 37.50 to 33.75? (-10%)

Comments (1 March 2012): Reanalysis with a focus on timespan of the corrections rather than strictly on size paints a much more obvious picture. Silver created a nearly perfect Elliott Wave: +13, -5, +21, -5, +13, followed by a -8. The question now is, did silver complete wave (1) or wave (i)? In terms of time, wave (i) doesn't make sense.

To be honest, I am seriously reconsidering for numerous reasons my original belief that we really are in Major V instead of III-3 in gold and silver, and the price will now accelerate upside with smaller (and quicker) corrections along the way until the final top occurs. For example, the next major correction in gold will be -13%, then -8%, then -5% as wave five extends. Each move upward would add 1.618 nominally to the previous move in gold (e.g., +775, then +1250, etc) and 2.618 to silver. My original expectation was that the mania ends in 2015-2016. Gold still goes to about US$33,000, and silver goes to, um, US$7,700. That number will be readjusted later. The next major silver crash (-34%?) would happen at US$135... After further analysis this weekend to confirm my theory, I may officially change this article to 'Tracking Major V.'

Possible complete wave count
III. 8.40 to ?
-1. 8.40 to 49.82 (+493.1%)
-2. 49.82 to 26.15 (-47.51%)
-3. 26.15 to ?
---(1). 26.15 to 37.50 (+43.4%)
----(i). 26.15 to 29.73 (+13.69%)
----(ii). 29.73 to 28.53 (-4.04%)
----(iii). 28.53 to 34.51 (+20.96%)
----(iv). 34.51 to 32.64 (-5.42%)
----(v). 32.64 to 37.50 (+14.89%)
---(2). 37.50 to 33.75? (-10%)
---(3).
----(i).
----(ii). (-8%)
----(iii).
----(iv). (-8%)
----(v).
---(4). (-13%)
---(5).
----(i).
----(ii). (-8%)
----(iii).
----(iv). (-8%)
----(v).
--ii. (-21%)
--iii.
---(1).
----(i).
----(ii). (-8%)
----(iii).
----(iv). (-8%)
----(v).
---(2). (-13%)
---(3).
----(i).
----(ii). (-8%)
----(iii).
----(iv). (-8%)
----(v).
---(4). (-13%)
---(5).
----(i).
----(ii). (-8%)
----(iii).
----(iv). (-8%)
----(v).
--iv. (-21%)
--v.
---(1).
----(i).
----(ii). (-8%)
----(iii).
----(iv). (-8%)
----(v).
---(2). (-13%)
---(3).
----(i).
----(ii). (-8%)
----(iii).
----(iv). (-8%)
----(v).
---(4). (-13%)
---(5).
----(i).
----(ii). (-8%)
----(iii).
----(iv). (-8%)
----(v).
-4. Expected -47%
-5. Expected +493.1%

Disclosure: Long physical gold/silver.

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Silver is heading for 67 or 100

Disclosure: Long physical gold (avg. price US$900) and silver (avg. price US$17).

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Gold and silver charts (26 February 2012)

I'm looking at the long-term and short-term pitchforks.

Gold:

Silver:

Gold obviously has some resistance near 1800. It might not make it above that mark this week. But, there's little downside from here. Gold already spent three weeks forming a rounding bottom, and it just broke out above 1760 resistance AND an inverse head and shoulders. While it may retest 1760 (now strong support) this week, a break above 1800 should send gold to 1943-2000 before a significant correction.

Silver is breaking out of the bull flag portion of the cup-and-handle. In other words, silver is going straight up. It might be time for silver to get silly. It should be targeting at least 41-43 based on the wave count and inverse head and shoulders target. Above 37, though, buyers could storm in. In an inflationary world, silver is going to outperform all other assets. Why do you think I've been recommending it on a fundamental basis for years. And then you look at the technical picture of a cup and handle...

Disclosure: Long physical gold (avg. price US$900) and silver (avg. price US$17).

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Fibonacci Ferrari

I am convinced that people consider objects to be 'beautiful' when those objects demonstrate as many instances of the golden ratio (1.618) as possible. The ratio appears constantly in the human body, art, nature, and the financial markets. A few days ago I was discussing sexy cars with my apartment manager, and I assumed that the golden ratio theory also applies here. I decided to test the theory.

When I think of a sexy car, I would say that a Ferrari comes to mind right away. I found a picture of a side view of a Ferrari and looked for instances of the golden ratio. Not surprisingly, it was almost everywhere:

Conversely, when I searched for "!GI ugly car" on DuckDuckGo, almost every image that came up was a car that looks like a cube:

While the Austrian school teaches us that everyone values objects differently, I doubt that many people are buying these ugly ass cubes because they think that they look sexy.

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Silver broke five resistance levels in one day

Previous high at 34.50: broken
Inverse head and shoulders at 34.70: broken
300-day moving average at 34.69: broken
200-day moving average at 34.94: broken
10-month downtrend line at 35.40: broken

That's the freaking downtrend of the handle of a 32-year log-scale cup-and-handle pattern that it's breaking out of today.

Bitchez.

Disclosure: Long physical gold (avg. price US$900) and silver (avg. price US$17).

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