Silver - August Turning Point

After a crash such as Silver experienced in May, there is most commonly a capitulation type of bottom followed by a strong rally.  For example, SPX capitulated in March 2009.  Silver never capitulated, but rather the lengthy period of sideways trade from mid-May to mid-July seemed to absorb the selling pressure sufficiently to bypass a capitulation.

The end result is that Silver could have one additional push higher in coming days due to the larger cycles in place.  From my point of view, the cycles for SPX are very negative going into August 10th +/- 1 day.  Lately Silver has been inversely correlated with SPX, therefore, Silver could be setting up to push higher into the 10th. 

However, due to the larger cycles, this also means that Silver topped in April, and a major lower high could complete by mid-August with a steep decline to follow. 

The picture for the US Dollar is the opposite.  There are clearly serious problems with fiat currency in the long run, but this is not the time for a real crisis in the US Dollar. 

After the topping process is complete, extreme weakness is anticipated for Silver.  With some small bounces along the way, the target is $18, and eventually much lower.  Ultimately, I see all of this being the early stages of a long term bull market for Gold and Silver.      

2hour Chart

        

$SPX - Short Term Update

The July 22nd time cycle was a major cycle, and that resulted in a high, and then reversal with a sharp selloff. 

The market may pause soon, but bounces may only be moderate, and another sharp decline appears likely.  As far as timing, a bottom target near 1263 may be approached in as little as a few days time. 

August 10th +/- 1 is also important, and a significant selloff into that date is anticipated.  It is possible that is the bottoming date if things develop a little slower.      

30min Chart

$SPX - Time/Price Targets Hit Exactly

The 1347 SPX target was hit exactly on Thursday, July 21st.  The time target was met on Friday, and suggested some type of decline next. 

The news in the media is currently dominated by negative reports of potential US default, and breakdown in debt ceiling/budget negotiations. 

However, when the Financials index Rifin is plotted versus SPX (as shown below), Financials were clearly leading up last week.  GS, for example, was a very strong performer despite weaker earnings.

It is necessary to upgrade to a significantly more bullish stance given the above facts.  Additional updates will be forthcoming with price and time targets.  For now I will say that a move to 1360+ appears likely next.

10min Chart

 

 

Silver - Symmetry Update

There has been support lately from the turquoise fibonacci fan.  The current symmetrical configuration may be indicating that the top is in, or near.  Even with this configuration there may be some further whipsaws and testing. 

Further price action will be useful to review closely for confirmation of completion.  

60min Chart

$SPX - 15min Update

There may be a retracement back to the 1303-1308 zone next.  A continuation of the rally may then follow into the time cycle July 22nd.  The estimate for that high is 1347 although a double top in the 1350's may be possible. 

15min Chart

$SPX - Volatile Week

This upcoming week could be quite volatile with high profile budget news anticipated.  I don't think that the bottom is in quite yet, but it does appear to be close to bottoming.  1303 is an important Red trendline.  I also see multiple supports in the 1295 area.  It is difficult to be precise with smaller movements, and it is possible that the market does not make it below 1300 SPX.

I see Tuesday July 19th being important, and the market may decline on the budget/debt ceiling news initially with a rise in the dollar.  However, I see a strong push higher likely into the end of the week with an important time cycle due on July 22nd.        

15min Chart

Silver - Extreme Declines Approaching

I am continuing to anticipate a shock wave to hit markets this week as I anticipate budget/debt ceiling agreements imminently.  Tuesday seems most likely for the announcement.

Silver closed at the pink trendline resistance on Friday, and could see some early weakness with a grind slightly higher later on Monday. 

The dollar should surge up initially on the news with Silver declining rapidly to point 9. 

15min Chart