Understanding Where We Are in Silver's Bull Market
Source: David Banister, Market Trend Forecast (5/2/11)
"After consolidation, buy silver stocks on any pullback with haste."
Below is the original chart I sent to my subscribers outlining this triangle pattern and the likely move.
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 day's 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.
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/oz. Any pullbacks in silver should be bought here and same with the silver stocks post haste. Below is my latest chart forecast on silver.
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