Elliott Wave 5.0 "Reboot"

Sunday, February 24, 2013

Silver , Fly Like A Eagle. Daily Chart Review!

For the last 4-5 months silver has been in a correction, that does not look Impulsive. If it was Impulsive then the silver price decline would be just getting started, and still take another 5-8 months before several more 3-4 waves were completed. . Since it sure looks like a potential triangle then the expected rally could be a vertical move to the upside.  Gold has the exact same pattern but only stretched out more.

I think we are going to see one more vertical move from silver, before it dies again. How high may be to the $42 level which is just above the open gap at $38.  If any trend starting out starts slow and then picks up speed, then that would be ideal.   The steeper the angle the faster the move, will help to determine if we are heading up to a "C" wave.  If there is a leg up left in silver, then I am sure there is a leg up left in the stock market. It would take a miracle for silver to go to the moon at the same time that stocks are going into a deflationary spiral.  The mega bears want their depression (deflation) and the Austrian Economists are calling for the collapse of the US dollar, they are looking for  hyperinflation. The problem is both cannot be right as both of them can also be wrong. 

Silver and gold have been flowing up and down with the general stock market, so for gold and silver to go into hyperinflation, they would have to dramatically separate their relationship with the stock markets. This would be a very rare occurrence, maybe even impossible and my wave counts would instantly go on two different paths.  For the US markets to suffer sustain inflation, interest rates are not going to stay idle for long, as they would explode just like they did in the late 1960's and 1970's and counteract any inflation. The inflation of the 1970's was totally different than today as in the late 60's wages for some of us was going up 20 percent per year. 
 TLT would be the best ETF to watch as TLT would have to implode before interest rates shot up. 

If the stock market is in a potential 5 waves in Cycle degree then chances are slim that we are going to see massive inflation nor massive deflation. The markets need higher interest rates to flush out and no longer support malinvestment by governments as it is governments that are the poorest allocators of capital.