Four days ago, on July 12th, we showed you an article about silver called “One last breath for silver”. In this piece of material we warned you that the metal is in the last stage of its bull-trend and a reversal to the south is likely. In order to make this forecast, we used the following chart.
During the previous week there have been plenty of news explaining why silver is rising and why it will rise more. However, based on The Elliott Wave Principle, our analysis made us disagree with the mainstream experts’ opinions. On the chart below you can see how silver developed after our forecast.
As visible, silver began declining very soon, drawing a nice five-wave impulse to the downside from 21.56 to 20.66. This situation showed us how, by using the Wave Principle, we can be bearish at tops, while the majority of market participants blindly believes that the trend is simply going to continue. A small three-wave rally is likely to begin soon, because every impulse is followed by a correction. Once this wave (2)/B is completed, we will have all the evidence we need to expect another sell-off in wave (3)/C.
