Silver XY Contract weekly 4-16-13

Elliott Wave Analysis of Silver (XY Futures Contract) by Sid from Click on the chart twice to enlarge.

Yesterday’s overlap in Silver below the May 2008 high of 22.862 prompted a fresh look back at historical spot silver price data, and the attached chart is the initial result. First, let me say that I’ve been counting the price movement down from the April 2011 high as corrective, as it should be because I believe it is a large degree wave 4. However, now with the overlap (shown in red on the chart), the size of the degree, a potential SuperCycle wave 4 would have silver possibly “correcting” all the way back to 1993 levels over the next decade or longer.

All is not lost (in my opinion) for those holding Silver, because after wave C (black) completes, if the attached count is correct, Silver is likely to retrace at least 90% of its move down from the April 2011 top. There are several reasons for this thinking:

  •  Supercycle wave 2 lasted 13 years. so this Supercycle wave 4 is likely to span a somewhat similar length of time.  It is currently only 2 years old.  With a decade or so left to go, that is long enough for very large structures to develop.
  • The move down from the top in silver counts best in my opinion as a Primary WXY (in burgundy).  Because Supercycle wave 4 is only 2 years underway, this would likely complete just Cycle (teal) wave A.
  • Since wave A (teal) would be some form of a “three”, Supercycle wave 4 is most likely to be a “flat”, in which case Cycle (teal) wave B must retrace at least 90% of wave A (teal).  The next most likely structure for wave B (teal) would be a triangle, in which case a retracement of at least .618 would be highly likely.  Wave B’s of both flats and triangles can also make all-time new highs in this case.

However, I’m getting ahead of myself, because Wave C black within Wave Y burgundy must finish, and so far, it has moved well past where wave C black would equal wave A black, and appears to me to be  incomplete.  The next Fibonacci targets of 19.50 and 16.77 are shown on the chart.  Silver is likely to reverse course somewhere in that zone in my opinion, because wave Y’s typically are not substantially outsized in comparison with their companion wave W’s.