The Rule of Alternation Is The Precious Metals Correction Over?

Liberty Gold and Silver

In Elliott Wave terms, a bullish up move contains five waves; 1, 3, and 5 are upside and 2 and 4 are corrective waves. As we analyze the waves that began in January of this year, we can see that wave 2 was a sideways consolidation to work off the initial thrust up off the January lows and wave 4, using the rule of alternation, was a very sharp and quick pullback relieving the overbought condition of the July/August wave 3 up tick. We believe that wave 5 up to new recovery highs may have begun Thursday, August 25. Without getting too technical, this was a much needed pullback to set the table for the next bullish rally. Quite likely, the sharp pull back was exacerbated by the dog days of August as volume is light going into another school year and the last week of summer vacation.  

We are watching things very closely between now and September 15th as our Gann friends, who use cosmic cycles in their work, are expecting big volatility because of solar and lunar eclipses as well as the eighty-four year Uranus cycle, which is identical to the same time frame and formation it was in September 1932. As an historical note, 1932 marked the low of the Dow Jones Industrial Average, the beginning of the bull run which continues to today and, of utmost importance, it marked the lows of almost every commodity traded. Stocks like Kennecott Copper ran from single digits in 1932, in the $3 – $4 range, and began a five year bull run in commodities that took stocks up into the $60s and $70s by 1937. We believe that this past January marked the lows in precious metals and we are early in a multi- year run that could see the same sorts of results to many junior miners.

We would use this pull back to continue to accumulate physical gold and silver on which you take delivery and store in a secure area or private bank or storage facility. Continue to accumulate junior miners for those of you who have a more speculative approach, always using stops, and remember, stock selection is of the utmost importance. We continue to believe that platinum and silver will outperform versus gold during the next rally upwards. One of our favorite ETFs is the pure funds ISE junior silver ETF ( SILJ), which we still consider an accumulate position.

SILJDaily

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2 thoughts on “The Rule of Alternation Is The Precious Metals Correction Over?

  1. “We would use this pull back to continue to accumulate physical gold and silver on which you take delivery and store in a secure area or private bank…”

    BANK???

    Bad advice.

  2. I’m not an economist but I play one on TV! My Uranus cycle is all “bunch up”! We need some stimulus (laxative) to relieve the pressure in the bowels of the market.

    “It all sounds like a bunch of shit to me”, said one analyst. Fear drives the market. “What, someone’s goin’ down, sell, sell, sell!” Now we can go snort coke and hire some hookers, happy days are here for the next month or two while we have our “fire sale”. “Concern for our investors? Yes, we’re happy to say your money’s safe with us, wait, oh, Poof, it’s gone. “Well, you know how the market works, here today, gone tomorrow.” Especially when you have shyster bankers gaming the whole system to their benefit.

    We should burn Wall Street to the ground and shoot all the rats as the scatter. Then we can take the Federal Reserve and torch the place. It would be a good start anyway.

    Get your gold and silver now, while you still can.

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