Over the last two weeks, the silver market has gone from "red-hot" to "black hole." Since rocketing to a 31-year high on April 25, silver prices have plunged 30%-plus in their biggest decline since big hair and bangles were all the fashion: circa 1980.
In the words of one May 6 news sources:
"A silver shock reverberated around the precious metals markets this week as silver went on a run in the wrong direction dropping over $10 in a week's time." (Associated Press)
But is silver's recent reversal actually a "shock"? Answer: Yes, and no. For those who kept their ear to the ground beneath Wall Street, it most definitely is. That's because in the days leading up to silver's downturn, the only discernable sound beneath the mainstream ground was the deafening boom of charging silver bulls.
- "Investors Stampede Into Modern-day Silver Rush," wrote an April 26 LA Times.
- And -- "We'll run through $50 per ounce for silver any day now," added an April 27 CNN Money.
"The trend is your friend," they say in the investment business -- but every trend ends. Elliott wave analysis can help you catch trend reversals -- before they catch you off-guard. On April 21, in EWI's Metals Specialty Service, editor Mike Drakulich went on high bearish alert regarding silver's near-term future:
"Silver's parabolic blow-off continued as we witness almost straight up action. This market will keep rallying until it exhausts itself. I'll repeat how dangerous this environment is. Once parabolics like this end, it gets very ugly, very quickly. Somewhere around 48-51 should be considered the next possible target zone. If we go there, it could be relatively soon as we are now in the most vertical phase of this huge parabolic move."
Mike Drakulich hasn't taken his eyes off silver since. And, in the latest Metals Specialty Service updates, he presents Elliott wave-labeled price charts and detailed commentary revealing whether silver's slump is just a bump in the bullish road.