Monday, July 20, 2009

Monday 5/11/09-Monday 7/20/09 60m September Mini Silver Chart

Shown is a chart of the mini silver futures contract for September. The silver count has been clear for some time now. Following a bull market in silver, also demonstrating a nice 5 wave pattern, there was a very clear impulsive [A] wave down that preceded a corrective (A)(B)(C) zigzag [B] wave. [A] began in March 2008 near the time of the Bear Stearns collapse after breaking 20. It is probably of primary degree.

Following [B], (1) appears to have ended with the (2) wave correction completing. Some retracement targets are shown. Notice how the 50% retracement target lines up with the top of wave 4 almost perfectly. There is more upside remaining for this bounce and is setting up for a big drop in price.

[A] bottomed in the 8s. Since the red waves are forming a zigzag, that area should be broken on the downside. This is a time when the fundamentals seem right for metals but they are not. This is a deflationary enviroment. Everyone is talking about inflation with bullish feelings for metals. This means just the opposite will happen.

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