Gary Christenson: During the past 12 years silver prices have bottomed, rallied sharply, collapsed, and then languished for a year or more. The patterns are not identical, but there are obvious similarities as shown in the following chart. (Note that it is a weekly line chart, from close to close, log scale, with high and low bars not shown. For example, silver might have bottomed on a Wednesday but only the Friday close is plotted.)Click on image to enlarge.
|Crash Lows:||11/23/2001, 5/7/2004, 6/16/2006, 10/24/2008, 7/5/2013|
|Launch Lows:||3/21/2002, 8/26/2005, 8/17/2007, 2/5/2010|
|Breakouts:||5/2/2003, 10/14/2005, 9/21/2007, 4/16/2010|
|Highs:||4/2/2004, 5/12/2006, 3/14/2008, 4/29/2011|
Since the bottom in November 2001 at a weekly close of $4.03, silver has had four launch lows, breakouts, highs, and crash lows. We await the next launch low, subsequent breakout and a new high in the 5th cycle.
Based on the chart, the high in April 2011 was quite high, the subsequent low in July 2013 was an unusually deep correction and substantially delayed compared to previous cycles. I interpret this extended and deep low as a reaction to the huge rally from about $18 in mid-2010 to nearly $50 in April 2011. High Frequency Trading and massive intervention since the crash of 2008 have pushed the prices for gold and silver much higher and much lower than in previous cycles. They have also made the timing projections less reliable, but certain parallels are clear.
The last four cycles from crash low to high have taken from 1.75 to 2.5 years. That suggests an upcoming high sometime in 2015 – 2016. The last four cycles from crash low to launch low have taken 1.0 to 1.3 years. That suggests an upcoming launch low sometime in 2014. Following the launch lows, highs occurred approximately 0.5 to 1.2 years later. That suggests a high sometime in 2015 or 2016. We will wait and see.(...)Click here to continue reading the original ETFDailyNews.com article: Silver: Four Cycles In 12 YearsYou are viewing an abbreviated republication of ETF Daily News content. You can find full ETF Daily News articles on (www.etfdailynews.com)
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