In the year 1890, the boom town of Creede, Colorado was growing by as many as 300 people a day.
The reason: Silver had been discovered nearby. But then came the "Panic of 1893," and the silver market collapsed. By 1900 Creede was a ghost town.
You probably know about the current silver boom. In April, prices soared to a high of $49.91.
A steep correction followed that high. But by late July, spot silver prices were on the rebound. Many thought silver prices were "back in the saddle again" and headed higher, but our Short Term Update was not fooled:
"The final stages of [Silver]'s countertrend rally traced out an ending diagonal...a structure that indicates an imminent trend reversal."
Short Term Update, July 27
The daily silver chart below is from that issue (minus the wave labels):
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Many investors are probably having second thoughts about seeing precious metals as a "safe haven."
On Sept. 22, silver sank over 11%. That was the biggest one-day drop since the rally high last April. But Sept. 23 was even worse: Silver futures saw a single-session decline of nearly 18%! Here's a quote from the Sept. 23 Short Term Update (full text is available):
“Today the active silver futures contract declined $6.47 from yesterday's close (17.7%), which is the second largest daily point decline in modern history. It's eclipsed only by the $10.00 decline that occurred on January 22, 1980, the day after silver's all-time high.”
"While gold’s rise has garnered the financial media’s attention, silver’s failure to confirm gold’s rally goes largely unreported. In our view, this gigantic divergence is critical. Last month we showed silver’s five-wave decline from the $49.91 high and subsequent three-wave rally. Silver made one more near-term pop to $44.28 on August 23. The next significant move should be a resumption of the larger decline that started at the April peak."
This is a before-the-fact description of exactly what's been happening.
Is it time to pack up your "pick and shovel" before the tumbleweeds completely take over the silver scene, or is a countertrend rally just ahead?
Our Short Term Update (published 3 times a week) offers you independent analysis of silver, gold, bonds, stocks, and more. You'll see our most recent charts, which include richly-detailed Elliott wave labeling. Accompanying commentary provides you with insights you can't get anywhere else.