Silver - Monthly (Log)

This represents my first attempt to label the longer term Wave development in Silver. We appear to be in a Wave -V- that has yet to conclude. The reason it looks unfinished is the nature of the waves up from the Wave -IV- conclusion (See Next Page).

<C>
-V-

<A>

-X-

- III -

- IV -

-I-A-X- II -W-B-Y-Z-

<B>

REPRINTED from 5/8/2011

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Silver - Weekly (Log)

While this Wave -IV- count might a bit controversial in that Im calling it a Neely Diametric, its difficult to see another count. All the price action from 2006 highs to late 2010 was highly corrective in nature. The final (G) wave was a triangle which explains the explosive nature of the move once it concluded.. From the (G) conclusion, there are only three observable waves. The Weekly candlestick is the one of the UGLIEST ever seen, so this is not a comfortable count at all. Though, an initial a wave down of a Wave (IV) would be a good ( III )? explanation for the violence of last weeks price action. The Bottom Line for this wave count is that the Wave (I) peak MUST hold. A break below $30/oz would mean the Wave -IVb concluded earlier and that a major Wave concluded near $50/oz. d

-V(V)

The Message for Bullish Traders is that there are some nice Risk/Reward Opportunities present for Silver, but that the $30/oz ZONE must be given huge RESPECT.
(D) (F)

(I) a ( II ) c ( IV )?

- III -

(B) (G)

(G)

- IV - IV (ALT)
(C)

(A)

(E)

REPRINTED from 5/8/2011

This appears to be a reverse diametric, the diamond shaped correction, as opposed to the classic diametric which is shaped like a bowtie.

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Silver - Daily (non-Log)

Looking back on the longer term charts and wave count, were left with this intriguing possibility--that the Wave (IV) has already concluded and were starting our final Wave (V). Theres a tendency for Waves 2&4 in to add up to a 100% in terms of their retracements. In this case, the Wave (II) was a shallow 38.2% and the Wave (IV) appears to be a deeper 61.8%. The b of (IV) appears short, but it meets the minimum requirement of retracing 38.2% of the a wave. ( III )? The alternate case is that were just in the middle of a much larger Wave (IV). Unfortunately, because of the size of the move up from $17, theres a wide range of Wave (V) targets-from $48.31 to $72.90. The idea that we might see a fifth extension cannot be dismissed. While the Wave (III) was exactly 161.8% of Wave (I), and it appears extended, on a log scale Wave (I) and (III) are about the same size.
1? b d

(I)
3 1 4 2 5 a c

e?

( IV )? - 61.8% Retrace

( II ) - 38.2% Retrace Wave (V) Targets: $48.31 for (1) = (5) $61.30 for (1) = (5) in % $72.90 for (5) = 1.618*(3) [fifth wave extension]

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SEP Silver Futures - 240 Min.

The theory that a triangle concluded at $34.81 should be easy to verify. If we are beginning a final Wave (V), then this market has NO BUSINESS trading back below $37.35, the 61.8% retrace. In fact, shorter term bulls should start feeling queasy if we trade below the 38.2% and 50% retracements. Post-triangle moves should be very powerful and shouldnt exhibit large retracements.

1?

e?

( IV )?
c a

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Silver - Daily (non-Log)

The other tool we can use is the Elliott Wave Channel, which is drawn using the line that connects Waves (II) and (IV) and then raising that line up to the Wave (I) termination. This method would suggest an extremely bearish scenario for Silver--we would witness a failed fifth, a wave (V) that fails to better the Wave (III) peak. This is a horribly bearish phenomenon in Wave Theory. So, there is much at stake for Silver in the next few weeks. The bottom line for Silver is that must keep building on its recent momentum. The (II) - (IV) trend line should be considered the key support for bulls. A break below this line would be ominous.

( III )

(V)

(I)

( IV )
Post-triangular thrusts often conclude and the triangles apex.

( II )

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Copper - Weekly (Non-Log)

One of the things about longer term Commodities Charts is that theyre a series of corrections, or ABC patterns. It makes them much different than the Stock Market, which can grow. Commodities tend to just correct from one emotional extreme to another. Copper has taken some body blows recently and is now slipping below psychological support at $4.00. One of the reasons its difficult for me to get bearish, though, is the look of the move up from 2008/9 lows. I can only see three waves up. So, my bias to label this current decline as part of a Wave 4 which must hold above $3.47. (C) The bad news for Copper bulls is that the Wave 1 was extended, which means that the 5 3 Wave 5 will be the smallest leg, so only a marginally higher high Copper.

(A)
a b

1 4

a b

REPRINTED from 5/8/2011

(B)

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Copper - Weekly (Non-Log)

The main question with Copper is whether or not the Wave 4 has concluded. Given the strong move up the last month, it does feel as if the a triangle Wave 4 did conclude and were in the midst of a final Wave 5 of (C).

(C)
5

(A)
4? 1

(B)

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Copper - Weekly (Log Scale)

The theory on this (C) wave is that it is a first wave extension. In these cases, the wave form should look like a wedge and the fifth wave will be smaller than the third. Similar to Silver, the 2-4 trendline will be critical for bulls. Under Wave Theory, the 2-4 line should not be broken unless (C) the entire wave pattern is over. 5

(B)

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Copper - Daily (Non-Log)

(C)
3 5 3 b 1? 5

d 1
-5-

4 a e 4? c 2

-3-

-1-

-4-

Copper bulls must keep building on the recent momentum. $4.21 should be good support if this count is correct. This looks like a market that will take out the previous highs, but as weve noted, the new high should only be marginally higher. Copper bulls should seriously consider trimming length into the new highs. A break below $4.21 would be considered bearish.

-2-

2
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Copper - Daily (Non-Log) - Alternate Count

This alt count is another reason the copper bulls should employ stop-loss strategies on length. We could be witnessing an expanding triangle Wave 4. The e-wave down will be quite violent but should hold above $3.45. Whats a 22% move down between friends?

3 5 3 b d

4 a

c 2

2
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Gold - Monthly Continuation (Log Scale)

The Gold move in the last decade has taken on a very interesting shape and form. Ive seen a lot of different interpratations on the Web, but none have been very satisfying. The orthodox wavers try to describe this move as a five wave impulse, but that count is simply wrong. The first 4-5 years of the pattern CAN NOT be defined impulsively. So, the move up from the 1999-2001 lows is a corrective move, the cycle <C> wave of a multi-decade TRIANGLE that began in the 1970s. I still think the <C> wave is of a - WXY - structure. The move from the 2009 has been channeling so perfectly and steadily, that were likely dealing with a symmetrical -Y- Wave.

-Y-

(X)

-W(Y)
An expanding triangle is the best way to describe the move from 2001 - 2006

(W)

-X-

All the waves between 2006 and 2009 were corrective. A running combination would explain the powerful move that followed.

<B>

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Gold - Weekly Continuation (non-Log Scale)

A symmetrical is a 9-legged pattern where the waves going in the same direction all share similar lengths and duration. This move certainly fits this description. All of the up moves were 275-300 dollar moves while all the down/sideways moves were generally flattish weak corrections. It still looks like Gold may have a little more left in it before the ultimate peak, but the symmetrical is the longest corrective pattern possible and this one seems to be very close to concluding. -YIts possible were in the final i-wave right now.
(I)

(G)

(E)

( H )?

(H)

(C)

(F)

(A)

(D)

(B)

-X-

Andys Technical Commentary__________________________________________________________________________________________________

Gold - Weekly Continuation (non-Log Scale)

A symmetrical is a 9-legged pattern where the waves going in the same direction all share similar lengths and duration. This move certainly fits this description. All of the up moves were 275-300 dollar moves while all the down/sideways moves were generally flattish weak corrections. It still looks like Gold may have a little more left in it before the ultimate peak, but the symmetrical is the longest corrective pattern possible and this one seems to be very close to concluding. -YIts possible were in the final i-wave right now.
(I)

(G)

(E)

( H )?

(H)

(C)

(F)

(A)

(D)

(B)

-X-

Andys Technical Commentary__________________________________________________________________________________________________

Gold - Weekly Continuation (non-Log Scale)

A symmetrical is a 9-legged pattern where the waves going in the same direction all share similar lengths and duration. This move certainly fits this description. All of the up moves were 275-300 dollar moves while all the down/sideways moves were generally flattish weak corrections. It still looks like Gold may have a little more left in it before the ultimate peak, but the symmetrical is the longest corrective pattern possible and this one seems to be very close to concluding. -YIts possible were in the final i-wave right now.
(I)

(G)

(E)

( H )?

(H)

(C)

(F)

(A)

(D)

(B)

-X-

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Gold - Daily Continuation (non-Log Scale)

Glenn Neely has described the recent activity as an expanding triangle. I think that is a better interpretation than my previous model. Though, but counts yield a similar message. This still looks like an irregular (or expanded) b - wave. The upper limit on such waves is typically the 123-138.2% retracement, but is allowed to go as high as 168.2%. So, this b wave should be concluding soon. Gold traders should prepare for a decent correction in the very near term.

b e

(G)

c a

c
(H)

d a b
( H )?

Andys Technical Commentary__________________________________________________________________________________________________

DISCLAIMER WARNING DISCLAIMER WARNING DISCLAIMER

This report should not be interpreted as investment advice of any kind. This report is technical commentary only. The author is NOT representing himself as a CTA or CFA or Investment/Trading Advisor of any kind. This merely reflects the authors interpretation of technical analysis. The author may or may not trade in the markets discussed. The author may hold positions opposite of what may by inferred by this report. The information contained in this commentary is taken from sources the author believes to be reliable, but it is not guaranteed by the author as to the accuracy or completeness thereof and is sent to you for information purposes only. Commodity trading involves risk and is not for everyone. Here is what the Commodity Futures Trading Commission (CFTC) has said about futures trading: Trading commodity futures and options is not for everyone. IT IS A VOLATILE, COMPLEX AND RISKY BUSINESS. Before you invest any money in futures or options contracts, you should consider your financial experience, goals and financial resources, and know how much you can afford to lose above and beyond your initial payment to a broker. You should understand commodity futures and options contracts and your obligations in entering into those contracts. You should understand your exposure to risk and other aspects of trading by thoroughly reviewing the risk disclosure documents your broker is required to give you.

Wave Symbology "I" or "A" I or A <I>or <A> -I- or -A(I) or (A) "1 or "a" 1 or a -1- or -a(1) or (a) [1] or [a] [.1] or [.a] = Grand Supercycle = Supercycle = Cycle = Primary = Intermediate = Minor = Minute = Minuette = Sub-minuette = Micro = Sub-Micro