Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stocks, Bitcoin and Crypto Markets Breaking Bad on Donald Trump Pump - 21st Nov 24
Gold Price To Re-Test $2,700 - 21st Nov 24
Stock Market Sentiment Speaks: This Is My Strong Warning To You - 21st Nov 24
Financial Crisis 2025 - This is Going to Shock People! - 21st Nov 24
Dubai Deluge - AI Tech Stocks Earnings Correction Opportunities - 18th Nov 24
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market Elliott Wave Analysis and Silver Recessions

Stock-Markets / Stocks Bear Market Oct 07, 2008 - 06:01 AM GMT

By: Roland_Watson

Stock-Markets Best Financial Markets Analysis ArticleWhen is it going to end for the stock market woes and for silver? The Elliott Wave analysis which helped us see this major top for silver and gold is giving a signal for the general stock market as we find it in the S&P 500. The chart below sums it up and tells us that the S&P bear market is almost over.


To give the main background, the stock market has been correcting the bull market of 1974 to 1999 (wave 3 at top left of chart). Before that we had a bear market between 1968 and 1974 (wave 2) which corrected the bull market of 1942 to 1968 (wave 1). We are now in correction wave 4 which is just about done. When that finishes it will be a final multi-year wave 5 up to complete a mega 80 year bull market which will be followed by a major bear market that may well exceed that of the 1930s and early 1940s.

Note that the S&P500 has been tracing out what we call a flat wave. This is the most common wave formation for a wave 4 and it has more or less been working itself out in textbook fashion. That means that the final leg down (or C wave) will erase most if not more of the B wave before we call this bear market over. Where that C wave is heading is shown on the decomposition of the wave to the right of the chart. A wave C of a flat correction is a 12345 impulse wave 90% of the time, so we have a degree of confidence in our wave analysis. We are actually in the worst part of the C wave as we enter the infamous "wave 3 of 3". That strongest downside will end soon and will then embark on a wave 4 correction before the final wave 5 down completes the 8 year bear market. Where that ends exactly will only become apparent as the pattern unfolds but I have a personal conviction that boarding the stock market train near that point will see great returns into next decade.

So where does this leave silver?

I have always advocated sensible asset allocation; never put all our eggs in one basket because the future may not be as certain as you think. With that in mind a proportionate and reasonable allocation both to equities and precious metals is in order. The truth for silver just now is that until this economic downturn blows over, silver is not a buy. There may be short term opportunities in silver (e.g. a B wave rally) but the real bottom lies a little further ahead. A chart of silver versus recession proves our point.

Note that silver does not do well during the recessionary periods in grey bars. I see no reason for that to change and am actually surprised we haven't entered recession already. When recession blows over and the main economic health indicators begins to flash green again we will be back into silver and look forward to more upside as inflation again begins to assert itself across the board. We will keep subscribers informed of both the general stock market opportunity as well as the precious metals one.

In the meantime keep your powder dry as fabulous buying opportunities beckon ahead of us!

By Roland Watson
http://silveranalyst.blogspot.com

Further analysis of the SLI indicator and more can be obtained by going to our silver blog at http://silveranalyst.blogspot.com where readers can obtain the first issue of The Silver Analyst free and learn about subscription details. Comments and questions are also invited via email to silveranalysis@yahoo.co.uk .

Roland Watson Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in