Happy 4th Birthday Silver Bear

Think back 4 years ago, and remember how good you felt as you saw silver rising parabolically.  You were likely thinking how you were making money hand over fist as it rose almost daily.  But, as we now know, the party had to come to an end.  And, now, we are celebrating the 4th anniversary since the silver bear was born.  So, I think it is only fit to say “happy birthday silver bear.”  Are you all ready to sing the birthday song while silver blows out its candles?

Well, if you are a silver enthusiast that believed in the imminent collapse of the civilized world as we know it, you are not likely too happy that the world did not end, and your silver did not exceed $100 as you were promised so many times.  Rather, for those of you that followed most of the pundits at the time, you likely are quite bitter now, as silver has lost 70% of its value from its high to low in this correction.  And, sadly for too many, we are not yet done.

What many have not yet figured out is that movements within a corrective phase in any market are highly variable.  This is the reason many have been so badly whipsawed during these last 4 years in the silver market.  And, what makes it worse for market participants is that they attempt to attribute silver’s movements to news events.  Yet, we have seen the almost exact same news events “cause” silver to move in opposite directions at different times.  But many still attempt to correlate silver’s movements to the news nonetheless.

So, where does that leave us today?  Unfortunately for the many that have been holding since the highs in 2011, it means that we are still likely going to be heading lower this year.  While we may still see one more strong rally to get bulls all excited again about the potential for the market to have bottomed, unfortunately, the probabilities suggest that silver will be stuck in this correction well into its 4th year, and heading to lower lows. In fact, it would probably rhyme quite nicely to see silver complete its correction when the gold bear turns 4 in the fall.  But, we still have close to half a year until that occurs. 

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See chart illustrating the wave count on silver.

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