A recent Financial Times article titled "Commodities Remember Gravity" describes the "cries of panic from commodity traders who had the rug pulled out from under them" in a market-wide free fall led by white-metal-gone-red, silver. (From their April 25 peak, silver prices have plunged 33% in their biggest decline in three decades)
It goes without saying that having knowledge of silver's downside potential BEFORE its prices crashed to multi-month lows would have been preferred over the alternative: i.e., losing one's footing and all-out panic. Such was not a benefit of mainstream financial analysis.
In today's "Chart of the Day," we plot silver's 2011 ascent with special emphasis on the weeks leading up to the metal's April 25 peak. There, we provide a series of popular news items surrounding silver VERSUS particular silver insights from Elliott Wave International's Metals Specialty Service from around the same time.
Below are the expanded versions of the quotations labeled on the chart:
- "We're Almost Going Back To A Barter System. Commodities Worth More Than Cash." (April 5 CNN Money)
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April 21 Metals Specialty Service: "Somewhere around 48-51 should be considered the next possible target one. If we go there, you could be relatively soon as we are now in the most vertical phase of this huge parabolic move. I'll repeat how dangerous this environment is. Once parabolics like this ends, it gets very ugly, very fast."
- "Silver's Mania Is Far From Over. There is no end in sight." (April 25 Daily News)
"Investors Stampede Into Modern-Day Silver Rush" (April 26 LA Times)
"The Wild Bull Market In Precious Metals Rolls On" (April 27 AP)
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April 27 Metals Specialty Service: "Silver has now rallied to the area of key [Fibonacci] 62% and previous fourth wave resistance."
- "The Market Hasn't Topped Out. The Reality is that metals are going up as an alternative asset." (April 29 Reuters)
"There doesn't look like there's any resistance." (April 29 Wall Street Journal)
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April 28 Metals Specialty Service: "A HUGE key for me is that internal 'momentum' is now at or above a [familiar] extreme. This tells me that the odds have increased significantly that a... peak is likely drawing near or is in place."
In truth, the vertical extent of silver's rally surprised even our analysts. But the main difference is: While the mainstream saw "no end" to silver's rally in sight -- our experts warned that exhaustion of the metal's uptrend was at hand.
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- Timely updates that keep your finger on the pulse of gold, silver and other major metals
- Valuable insight backed by editor Mike Drakulich's 30 years of market experience
- Actionable forecasts complete with charts, price targets and key levels
Empower your trading decisions with intensive coverage for the metals you trade. Learn more about EWI's Metals Specialty Service now>>