Futures Market Intelligence Report
Precious Metals & Bullion
Silver Alert!
November 13, 2011
Article updated 12/1/2011 6:27:42 am
NOTE: When reading our intelligence information reports the original text will be in white.
Updates will be dated, formatted in a light blue and placed logically within the report.
Significant changes will appear with a strikethrough. This preserves the orginal information yet
allows updates.
Silver Market
The Financial Police® are sharing their silver intelligence with all Citizens of the World. Our
intelligence information is showing a very high risk of a major price decline in the Silver market. At this
time, we do not have an intelligence report prepared for Gold. (Visit Gold intelligence information).
Intelligence Information Update 12.1.11
In our last update on 11.22.11 we forecasted a rally in Silver and a sell off in the US Dollar index (the intelligence report forecasted a rally in the Euro as well). So, what clues do we have based on current information?
The biggest clue we have is confirmation in the Currency markets based upon the last few trading days there. The Dollar is selling off and the Euro is rallying. However, the short term picture in the Silver market is ambiguous; therefore, we have to fall back to the overall strategy that Silver is headed for lower prices.
The risk in owning Silver is high. We don’t know how high this current rally will go. It is not giving us a clear picture. However, if it makes it to our previous closing target of $35.30, that would be good time to make your decision.
Silver was trading at $33.13 when this information was published.
The Spot Silver futures market is at a defining moment. A rare Elliot Wave diagonal triangle in the
"C" wave position is on the verge of completion on an hourly chart. If this pattern rains true, the ensuing sell
off will be dramatic. Silver is tracing out a “C” wave of an Eliot wave irregular flat correction as
illustrated in Chart 3. When completed, Silver will resume its bear market and will try to find support at $17
per ounce. However, short term analysis calls for a rally in Silver futures with a close equal to or above the
October 26 closing high of $35.30. (11.19.11)
On Monday, 11.21.11, $31.86 (± a dime) must hold on a closing basis and Silver needs
to move higher. A significant breach of $31.86 would indicate the intermediate term bear market has resumed. (11.19.11)
The most optimistic forecast calls for a rally as high as $39 (± a dollar) by
the end of next week. More information will be posted after Monday’s trading. At this juncture, this scenario
is completely negated if $31.86 does not hold as previously discussed.(11.19.11)
Intelligence Information Update 11.22.11
The intermediate term forecast for Silver to fall to $17 still stands.
Our short term forecast was half right and half wrong. It was based on a formation on the daily chart of Silver. That formation did not play itself out. However, Silver has found a short term bottom and is showing some strength today. In other words Silver will rally before it resumes the primary trend to the downside but did not fit our model. What matters is the strength is an opportunity to sell.
The most important information influencing Silver is the story we wrote yesterday about the US Dollar futures. A rare diagonal triangle has traced out and is forecasting a swift, sharp sell off in the Dollar futures market. We feel the metals will benefit from this outflow of money from the Dollar. Use the dollar decline as a gauge to how long and far Silver will rally.
Intelligence Information Update 11.18.11
The Silver futures market is set for a significant short term rally over the next few trading days.
For confirmation, Silver must not close below the 11.17.11 closing price of $31.68 today and must move higher. When this
short term rally is completed, the major bear market trend shown in Chart 3 should unfold.
When reading our intelligence reports always give the big picture the most weight. We use a combination
of monthly, weekly and daily charts mixed with "look out the window" fundamentals. Short term forecasts are made within
the context of the big picture, but rely more on daily and hourly charts mixed with fundamentals.
Please read the critical intelligence updated 11.15.11 below. The $35.30, or higher, forecast still stands.
Stay tuned for additional updates...
Intelligence Information Update 11.15.11
The diagonal triangle on hourly Chart 2 did not come to fruition. The pattern was
Elliot but the market dynamics and psychology did not support this outcome.
This does not change the overall forecast for a very large sell off in Silver. The divergence in
chart 1 still persists. The overall wave structure on the daily chart 3 below is still in force.
Zooming out and looking at the daily Chart 3 paints a clearer picture now. The “C” wave is completing a
five way structure to the upside except it is not an hourly diagonal triangle. The October 26 closing price high
of $35.30 should be equaled or exceeded on a closing basis.
Check this page frequently for updated intelligence information. The exact time of any updates is
clearly marked at the top of the page now.
Please read the original information to gain a perspective.
Gold & Silver Divergence
Click Chart 1 to view the full sized image. It clearly demonstrates the negative divergence and poor relative
strength Silver has had versus Gold since the beginning of October 2011. The red line below is Silver. Gold is the
black line.Chart 2 will show the actual Elliot Wave diagonal triangle.
Chart 1
Hourly Diagonal Triangle
We highly recommend clicking Chart 2 to view it full sized. The comments, lines and trend lines tell a
compelling story. Note the "E" wave in the image. Note there are four "variations," or predictions/outcomes,
projected. In Elliot analysis, an "E" wave of a diagonal triangle can do one of three things:
- Fall short of the upper trend line (anywhere in-between).
- Hit the upper trend line.
- Breach the upper trend line called "throw over."
Chart 2
IMPORTANT: Regardless of the final position of the "E" wave, the outcome will be pretty much the same – a large
sell off in Silver. Hard core Elliot Wave theorists will argue when the "E" wave falls significantly short,
it is an underlying signal of exhaustion. The truth is the entire pattern is a signal of exhaustion.
In this scenario, the most important criteria to determine the magnitude of the counter trend
thrust (to the downside) is the over all wave structure and the position of the triangle.
Update 11.19.11
The diagonal triangle in Chart 2 (above) did not unfold. However, the information remains so anyone reading
this report can track the history of our analysis and gain insight into Eliot Wave patterns.
Wave Structure
Chart 3 shows the overall wave structure of a daily chart of Silver. Again,
we strongly recommend clicking it to see the full size image.
Chart 3
The "irregular flat ABC correction" inside the purple oval is an Elliot pattern signaling exhaustion as well.
The "C" wave is struggling to retrace even 50% of the "B" wave. We saw that struggle when zoomed
in on the first hourly chart illustrating the divergence. Zoomed out, the daily chart provides additional
intelligence of the bigger picture.
Finally, the position of the ABC correction, in the overall wave structure, is also signaling weakness.
Our analysis tips the scale in favor the first wave down and the entire ABC "irregular flat" correction
up are of the same degree! This implies the following decline will also be of equal degree.
Next Week is Critical
This technical analysis shows the risk of owning, or being long Silver, is very high. There are
also enormous ramifications for the Currency markets as well. We will try to get a currency
intelligence information report out as soon as possible.
Update 11.18.11
We stand for and fight for the average Citizen. This type of intelligence is here for free as proof.
We sincerely understand the scarcity of high quality information available for the average Citizen.
Thank You
William Bonofiglo
Director of the Financial Police®
November 13, 2011