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Sunday, May 19, 2013

Silver - Cycle Low with Powerful Spike Up Next

Silver is likely bottoming out at the turquoise arrow Cycle low.  

The bear market in Silver is just over the halfway mark in the Cycle.  Notice that numerous rallies occur throughout the Cycle.

The Cycle shows a powerful spike up next for Silver from the turquoise low.  Silver may act as a safe haven and spike up next - fear trade. 

2day Chart
















Silver Bear Market Cycle:










91 comments:

  1. Silver is likely to act as a safe haven with SPX plummeting next in my view. This is one of the most powerful spikes in the Silver Cycle coming next.

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  2. Yet another Cycle that signals we are at an important turning point in the markets.

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  3. Gutsy call considering the carnage. In fact, silver apparently hit below $21 briefly in the Asian (Sunday overnight) market which would imply $20 SLV.

    The beginning of bear market cycle in silver outlined is late Apr 2011, with mid point late Jun 2012, and I am eyeballing your projection of late Aug 2013 as the end of the cycle or about 28 months. One question: could you point me to one of your previous posts about how you went about calculating such an odd 28-month cycle or if nothing done before then briefly outline how you came about this late Aug 2013 target?

    And do you think it is merely a significant spike up rally that eventually leads to a further continuation of the bear market or the beginning of a new bull market in silver?

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    1. A Cycle low is due at the turquoise arrow and powerful Silver rally next. The Cycle predicts that the bear market in Silver will continue after this rally.

      To reach the end of the Silver bear market will still take just over a year according to the Cycle.

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  4. SC Sept 24, 2011:

    "My theory has been confirmed as explained earlier this summer, and the recent collapse in Silver and Gold was indicated by the symmetrical patterns. Fundamentally, the European crisis is nearing an end, and this is clearly reflected by the recent price behaviour of Gold and Silver. Notice that I did not say "solved", but rather the current "crisis" is nearing an end due to the cycles. Without a crisis on the near term horizon, there simply is no reason for Gold or Silver to act as a safe haven.

    To be clear the Euro situation (and Global situation) isn't going to be resolved any time soon. It will be an ongoing problem for years to come.

    However, the PM's are sending the signal that the current phase of Euro crisis is nearly over - early Oct. The Euro situation is a loss of confidence, and that confidence will ebb and flow - as always. That is the nature of cycles."

    http://cyclicalmarketanalysis.blogspot.com/2011/09/silver-collapse-resumes-2012-target-650.html

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    1. In this Sept 24th, 2011 analysis, I outlined the purple arrow low in the Cycle, and the "M" shaped bounce to follow.

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  5. VIX up 6% & still the decaying beast can't get off the floor....

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    1. VIX looks like it can pop over the next couple days so let's see if UVXY perks up.

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  6. SC, Whats your price target for silver and time frame?

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    1. Silver should see a powerful spike. Say about $10 higher over the next month or so. Safe haven fear trade.

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    2. That is a near 50% move for Silver.

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    3. $10 is too optimistic IMHO. At best it is max $5 higher and that would coincide with significant resistance at $26.20 for spot silver which was the level it broke down from before the plummet in mid-April. That is about $25.40 SLV price.

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    4. I think Silver and especially Gold will surprise how well it does from this low. Gold is set to go parabolic in the Cycles I use.

      Gold can reach over $2,000 over a month or two next.

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  7. I'm going to look to build a position in Silver for the spike up.

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  8. Gold is holding the mid-April low relatively better than Silver.

    I'll build a position half Silver and half Gold. Gold could really rip and hit a new high on a spike next.

    Gold can reach $2,000 or better on this move!

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  9. SCMay 17, 2013 at 12:52 PM

    Shorted SPX at 1667. Maximum overweight position.


    What does maximum overweight position mean?

    Do you have a stop (physical or mental) in place?

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    1. It means I've taken a very aggressive position short SPX, and have the entire position that I want in place now since the Cycle is mature.

      The only reason I would stop out of the trade is if the SPX Cycle were to break. The Cycle has called all major moves in SPX for years, and I see no reason it would change. I would post if there was any change. The parameters would include time, and price and other parameters etc.. The Cycle is the stop.

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  10. "The Cycle is the stop."

    What exactly does this mean?

    If SnP pushes higher from here, what will be your actions?

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    1. SPX has completed the expanding pattern with the overshoot of the red line as predicted by the Cycle. Therefore, I have taken full short positions in SPX.

      I hold my positions for the next move in the Cycle which is a collapse below both the upper and horizontal red lines. Provided SPX follows through with this collapse I hold my short positions.

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    2. SC,

      What will be your actions if SnP500 pushes higher from here? 1680+?

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    3. I hold my short positions for the Cycle SPX crash.

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  11. Silver is feeling that Cycle low!

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  12. Dear SC,

    Good to see your views on silver and gold. If I understand well, you are really bullish for the precious metals over the SHORT TERM. I really like how you understand what drive gold and silver : the currency crisis we are facing.
    In my opinion, gold and silver are not ready to go up in the short term as I explained in my article : http://seekingalpha.com/article/1424981-gold-summertime-blues
    The next big event to watch is german elections in September 2013 that could destabilize the eurozone.

    Cheers

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    1. Yes. The Cycle is suggesting to watch closely for the Silver/Gold lows to form soon, and I'm very bullish from the turquoise low.

      Important to emphasize that Silver is still in a bear market overall so any rallies are just counter to the bear market trend.

      Gold is starting to look especially attractive in my work.

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  13. Do you see the low for silver is in or you expect lower to come before the big spike up?

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    1. It popped today, but it still may be a little early.

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  14. There's a Major Bradley turn date on June 22. When I saw it at the begining of the year I didn't think we had a chance of going up until then but now it's possible
    http://screencast.com/t/Jyxai4IWjI

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  15. Sure enough today was a good time to short SPX. Hit a high and looking weak.

    SCMay 17, 2013 at 12:55 PM

    "Some Cycles that I use suggest Monday might be a good time to short, but SPX has overshot the red line enough to look right in the expanding formation."

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  16. SC, do you think that sp500 can reach 1700 or it is really unlikely ?

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  17. The mkt can easily reach 1700 if we get a small pullback from here....that would frustrate the bears even more.

    The trend is your friend until proved otherwise....everything else is pure noise.

    That's why I scale my buying of UVXY accordingly as it could go down to 5 still.



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  18. SC, let me get this correct. You are saying gold s going to over $2k(very BIG call)and silver is going to over $30 in a month or two and then silver will collapse to under $10 in 2014?

    And then what about gold?

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    1. Yes, that is what the Cycle predicts. Gold to go parabolic, and then decline dramatically.

      The bear market in the Silver Cycle is due to finish during the second half of 2014. Gold should bottom during that time frame as well. I think there will be selling into that low due deflation. It will force liquidation.

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    2. SC, I have Au and Ag ralying into September but 2k!...........that's way way over the top I think. I am expecting a retest of $1520 resistance. ifit goes over 2k that is setting up a whole new trend.

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    3. Markets are setting up for big, fast moves in numerous Cycles. The next couple months are going to be wild!

      Gold especially looks very positive in this Cycle configuration. Notice how it held better than Silver yesterday.



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    4. Well mate gold will want to hurry up and do somethng very quickly because it has all but given up any gains from yesterday and the daily is starting to reverse back down again after turning slightly up yesterday, as for silver. It looks worse.

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    5. There still may be a little downside but the Cycle suggests to watch for the low to form soon.

      I'm looking to take positions.

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  19. The very long term outlook for Gold and Silver looks incredibly bullish. I have a Cycle that shows how that unfolds.

    I warned about the bear market for the metals in 2011, and the Gold and Silver bulls didn't like to hear that. However, there is the time and place for the metals in the Cycles.

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  20. Sc, not sure why you say a move to $2000 gold is parabolic....thats only $50 above its 2011 high....also, why move up now? Is this supposed to coincide with the spx plunge to point P? (If so, that would make sense as people flock to safety..)

    Then a crash to ???...if silver is $10 then gold would be $6-700?

    I ultimately think gold will hit $5000+ with parabolic spike to $12000 or so...

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    1. The Cycle shows a parabolic shaped move up from the turquoise low. I think it will be particularly parabolic shape for Gold.

      Yes, the SPX Cycle is peaking and extremely negative whereas the Gold and Silver Cycle is forming a low, and the Cycle shows a spike up. Similar situation to July 2011. Yes, Gold and Silver are about to see safe haven demand in my view for a couple of months.

      Yes, in 2014 the Cycle suggests Gold well under $1,000.

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  21. Emotions flying high once again in the room....one step at time I say...1361, put a stop on for $10.

    If no stop, you end up with a bias view as in UVXY which was a buy at 14.50 but now 5.74.

    I bought more UVXY....av 5.85 now.

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    1. Whats your stop on $5.85 UVXY.?

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    2. My stop is 5.35...won't risk more than 50c on this trade.

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  22. Well Gold could still drift a little lower. At this point, the Cycle is simply saying to watch for the low soon.

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  23. Important supports are $1310, and $1250 in my work.

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    1. It may or may not reach those levels, but time to start watching for a low to form.

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    2. SC do you still expect the VIX to get below 12 or a short pop here?

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    3. Probably both. I think it can pop here, but VIX likely under 12 also.

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    4. Phil, the mve to 13.40 this am was the pop....now the drop...lol!

      I *will* add uvxy aggressively on any VIX drop under 12

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    5. VIX still holding quite well. A pop to 14.50 VIX short term looks possible.

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  24. Short squeeze in metals setting up, and agree with the Cycle. Look at the numbers:

    Silver’s net long position tumbled last week (-72% on the week!) to +1,413 contracts.

    The total short position in Gold short contracts to its highest position ever (74,432 contracts).

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  25. There is the fuel for the big move. Safe haven demand will spike imo.

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  26. Hi SC

    your overweight price looks like it slipping. We going higher again.


    Thanks!

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    1. Well SPX has already overshot the red line enough to satisfy my model which is why I am now fully positioned short. The next move in the Cycle is a major decline for SPX.

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  27. This latest rally was obviously a 3 so a corrective 4 could take us back to 1650ish before a final rally to 1700.

    Let's face it, the whole world is bearish now so the mkt isn't going down just yet until people throw the towel in.

    That would make sense for those who are looking for the VIX under 12 again.

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  28. I do think we'll see the VIX under 12 though it may bounce first. So I agree that complacency can reach an extreme, and is not quite giving that signal just yet.

    However, SPX in my Cycle model has little upside. I've seen VIX move with very little movement in SPX.

    It's a waiting game, but it is late in the game...

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  29. It's nice to be the only BULL here. Just move your stops and walk away. Calling TOPS can be a dangerous game.

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  30. Just pointing out to the readers that you were bearish in early June 2012 calling for P3 down, and now here to tell everyone to "buy the dips" in S&P. More evidence of major market top near.

    Now that you are bullish the big crash is nearing.

    June 1st, 2012:
    Unknown has left a new comment on your post "XIV - Triangle Pattern":

    "LOL!!! If it hit 10.45 in the near term, I will leave you alone."

    UnknownJune 13, 2012 at 1:13 PM

    "You guys better listen to my boy T-bone over at Daneric's blog.

    P3 is getting ready to start!!!"

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  31. "unknown" marked the SPX top to within 5 minutes!

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  32. Nobody knows where the top is.....we will only know in hindsight.

    Bought more UVXY...long at 5.88 now.

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    1. Looks like VIX heading up to test 14.50 area short term.

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    2. DON'T JINX IT SC....let it go up by itself...LOL

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  33. I don't recall the VIX being so disconnected with the markets as it is now

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    1. This is the 10th week VIX higher than the mid-March low.

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  34. SC, can you clarify your roadmap about UVXY and SP500 in terms of target price AND time.
    You expect an imminent crash in SP500; it is now at 1680.

    Thanks

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    1. Let me do the updated Cycle charts and can explain in detail.

      At this point we are simply waiting for the topping process to complete. SPX price and behaviour looks great compared to the Cycle model with the overshoot of the red line. What we don't have just yet is the ideal configuration for VIX.

      The initial crash down to P in the model is likely to occur from a lower high for SPX much the same as July 2011.

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    2. It is important to differentiate between a top and the actual crash. Technically the crash down to P occurs in this Cycle as the horizontal support at 1540 SPX breaks. Right now we are forming a top in the Cycle.

      Just want to be clear.

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    3. What's the reason behind your 14.50 short term on VIX?

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    4. 14.50 VIX comes from a pattern I am watching. Also the VIX 200dma is at 14.90.

      The test will be to see how VIX acts at that level.

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  35. Hi SC, the question is was today the final blow off, looks like it could be a nice topping tail.

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    1. This was the most significant dip since mid-April. 20 points. What makes it interesting is the way it surged up then reversed.

      Let's see how the moves next, but in any case this was the first sign of exhaustion.

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    2. So we'll take it one step at a time.

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  36. What would be your first downside target on this drop?

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    1. SPX is at the key red line level. The question is whether that is ready to break. We'll have the answer soon, and need to see lower for confirmation but it's a start.

      Once the red line breaks then 1550 to 1570 SPX is the level to watch.

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  37. lol thank god I dont have a position in UVXY

    such a scam this etc.

    Vix up 3.5 % .. uvxy up 1.5 lol its suppose to be double the vix isn't it?
    sigh

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    1. No, UVXY trades off the VIX futures, not the VIX itself.

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  38. HUGE reversal, biggest since 2008 YESSSS .. UVXY up 6 cents !!!! SIX pennies !!!!

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  39. Well it works both ways. UVXY has been holding solid for weeks while SPX has been rising.

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  40. SPX update coming. SPX closed right on the red line.

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  41. VIX hit 14.45.

    SCMay 22, 2013 at 8:08 AM

    "Looks like VIX heading up to test 14.50 area short term."

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  42. Any thoughts on the next target?

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    1. SPX is at the key red line level. The question is whether that is ready to break. We'll have the answer soon, and need to see lower for confirmation but it's a start.

      Once the red line breaks then 1550 to 1570 SPX is the level to watch.

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    2. If we can see confirmation on SPX moving lower than the red line, then UVXY $7.50 to $8 becomes the next area to watch.

      However, it is early to tell if SPX is ready to break the red line.

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  43. SC, how high do you see uvxy getting this week before retrace and vix possibly under 12? Thanks.

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    1. Currently we are testing the key red line SPX level. It is a little early, but if we can get confirmation of SPX breaking below that red line, then UVXY $7.50 to $8 is the area I'll be watching.

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  44. Markets rattled by Japan. Klyle Bass predicting a full blown Japanese crsis begining NOW.
    Not sure how that will effect the metals but I went long stocks and metals on Tuesday due to the relative strength of GDX to gold.
    I agree with SC and expect to see a rapid rise in gold into September. As far as 2k goes?......can't see it.
    SC I would like to see a update on gold soon if you can and how you arrive at that target.

    Cheers

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