Sep 162011

Silver saw a steep drop from $50 to $32 in the month of May and the rise post that has been in a corrective fashion.

Silver - rising wedge

The above chart of silver shows a rising wedge pattern with a typical throw-over to the upside. Yesterday's close was well below the bottom of the rising wedge and this should usher in a sharp down move for the industrial metal probably before the end of this month. Looking at the chart from an Elliott wave perspective, silver is probably in its powerful 3rd wave or C wave which has the characteristics of wave 3. At $26.7 the first leg of the decline from 50 would be equal to the move from 44.27 (and hence A=C), the August peak, which seems like the minimum drop that is likely for silver. Also the $26 zone is the previous 4th for Silver.

Naturally, some of us would be thinking, "what happens to gold now?"

Gold Daily Chart - Potential for a double top

Here too, it is obvious that Gold is running into troubled waters. A fake print above 1913 high, momentum disagreeing with the new high in price are all tell-tale signs of exhaustion. A close below 1763 or an intraday drop below 1705 would complete a double top for gold and should draw prices at the very least to 1480.

Given the fact that the Dollar Index too had a breakout to the upside just a few days ago,  you might want to pay considerable attention to these signals in the precious metals space.

  96 Responses to “No silver lining for silver”

  1. Hi Jai,
    61.8% fibonacci retracement of 2009-2010 bull mkt comes to arond 13k for sensex and 3991 for nifty.bear mkt which started in Nov 2010 can be expected to end here?Election gap 3709-4000 also coincides with 61.8% retracement.ur take on it?or do you believe we are giving up entire rise from 2550?or you wl reassess the situation once we r at 4300-4200 and tak it frm there?lot of comfort frm ur 2 statements made earlier:-1)bear mkt bottom is not an event but a process.2)as and when bottom wl be made insurance of buying 2% to 4% higher even if we wl not be able to catch exact bottom.
    By the way have u heard hindi movie bobby’s hit song’Na maangoo sona chandi,Na maangoo hira moti,yeh mere kis kaam ki?jiyo jai !

    • hi rajesh, i am giving my own opinion here…. in the absolute short term nifty is showing signs of double bottom at 4700-4750 and once we cross 5150 , which seems to be difficult in the last 3 times we went there,,, then 400 points open on the upside…… so ur view as per fib , etc is correct but for that to happen nifty should break 4700 first .. till then extreme short term trend is up……….. as u aware that in technical analysis .. chart patterns do fail from time to time…….
      i am also waiting for jai to reply…………..

  2. Hi Ananth Madhav,

    Like you, I am also taking this liberty to reply to questions/queries/observations not posed/related to me/my views.

    Ananth…IMHO (In My humble opinion), we should keep the sanctity of this blog intact by letting jai answer the queries because that is why everybody visits this blog. I am sure u must be a great TA in your own right but lets say…”Jai has proved his mettle and people know his name and blog”

    Also, in your earlier post , you had specifically asked Jai if he would be “ok” in case someone else (Read Ananth Madhav) replies to the queries….and to my amazement u didn’t even wait for his reply befor answering a couple more. Trust me…at least I would call that rude !!!!!

    And seriously…what did u expect Jai to say … that he “isn’t ok” if someone else replies to queries. I dont think that the gentleman he is, he would have said that.

    Plese do ponder over the same. No hard feelings


    • hi rishabh,,

      first of all no hard feelings… i am giving my view not answering to the queries ………… its just my opinion i said……….. still if u feel i shouldnot have given my opinion my apologies…

  3. And yessss…there is a BIG difference between a blog and a forum 🙂

  4. hy jai i following elliott wave in interday by using chart of day open high low can use to watch15m 30m chart RSI .to watch in easy in interday chart software

  5. Dear Anant Mahadev

    I think you should refrain yourself from giving advice on this post. It may confuse us all. I want Jai only to give the responses.
    Hope you understand our feelings.


    • Hi Everyone,

      Not able to respond to queries, down with a flu this week. Hope to be better by weekend or Monday.

      Ananth and Rishabh thanks for being mature adults in your comments.


      • Jai,

        I told you….asking again…need an assistant ? 😉 pun intended 🙂

        Get well soon

  6. hi jai
    . get well soon. really missing you. it has become an irresistable habit to follow your blog…. really waiting for ur views..

  7. Jai
    Get well soon

  8. get well soon jai .this is jai’s blog and let jai reply . bcoz of jai only i am following this blog . he is 3rd eye to see that chat and give his best view and 100% result.

  9. hello sir
    you will get well very soon

  10. hi
    take rest and get well soon

  11. technical analysis is an easy subject…………….. only some interest is needed to learn it……….
    i am a lecterur and teach IIT JEE maths by profession and due to my interest in T A i left it and started reading books on T .A.
    jai ,,,,,,, followers of ur blog are mad to know ur views……… seems that they are believing that if u say market will go up then it moves and vice versa……………. its not my intention to degrade you………..
    but as i am becoming aware of the part played by chart patterns…………which fail reasonably a no of times………… my belief is markets are the ultimate winner…………… not john murphy, not steve nison,. not
    ashwani gujral. not chartered market technicians………. not —– any so called expert… i am also preparing for CMT…….-========== we have to follow the markets and any expert has also to simply follow the markets…………. so as long as nifty stays in the range of 4750 -5150. non of the so called experts can predict which way markets move……………….

    jai bhayya……………… it may appear that my comments are rude……….. but thats the truth………
    i have attended a lot of paid seminars where the analysts behave as if they are demigods and when i tried to implement what they said on the markets they simply failed………….WHAT EVER MARKETS ARE WILLING TO GIVE US WE HAVE TO TAKE THAT AND BE SATISFIED ……….
    what i have learnt from the markets is as BILL WILLIAMS has said ……… WANT WHAT THE MARKETS WANT……………… IF UR WRONG PLEASE HAPPILY ACCEPT THAT ………. AND GO WITH THE MARKETS……………………


  12. i want all ur bloggers to make serious money…….. or in other words TRADE FOR A LIVING….. which i am doing right now……………. i want to share one aspect which will really make a difference in ur trading carrer………………….I AM PRACTICSING THAT SERIOUSLY………….. BE A VOCIFEROUS READER……..
    read whatever u get on T.A…….. my apologies jai i am using upper case…………..


  13. It was always interesting if some one disagrees. I really love to see what Jai Bala going to reply (if at all he want to reply).

    Ananth Madhav, Your captial letters giving the impression that you are yelling at some one. Chill out sir.

    Jai Bala, could not wait for your seminars. get well soon.


  14. hi everyone.

    dont read upper case letters as yelling at someone ,,,,, i am highlighting…… in India we often do that….. when something is really imp we use that…….


  15. Hi All,

    * The least we can do right now (knowing that Jai is not well) is to cool down………..rather than giving our own disparate views

    * Since it all started with my older query about DJIA & Nifty, I think we are back right there (Dow having closed below 11000), and Nifty having to tackle level of 4900, and ofcourse Dollar index back to its recent peak… the query is sorted by default……….

    * This blog is all about receiving views from Mr Jai Bala, and not for providing our personal views here…..while anyone has every right to think that he has a better view, but providing the same here, unsolicited, may not be a great idea

    * Lets all wish Jai a speedy recovery, and we await his active arrival ASAP

    Thanks everyone…….

    PS: He is not a demigod…..but GOD in our own sense!!! 🙂

  16. hi all,

    How often have you folks come across guys who focus on the larger picture? Rarer are the guys who get them right. Even more rare are chaps who get it right as often as this chap who is running this blog. If you guys are not making SH***** loads of money from the information presented in this blog, take it from a professional trader, it rarely gets better than this, you guys would be better off away from the market. And Mr Maths professor (Ananth Madhav)- keep your lectures to your maths class. 

  17. Mr Professor
    Ru telling all well known technical experts like Louise Yamada are wrong. Just get this right. No science is perfect elese we would have had space ships moving from one galaxy to another by now. So till it happens its called science fiction. The same applies to TA. Nothing is perfect and nor is Jai professing to be the perfect TA. I am a TA trader too. I am not as good as Jai is but as a professional TA trader I have survived and made good money. I have suffered at times due to TA going wrong too. So as u said market is supreme but to make money within that supreme space requires some analysis too. TA is one science, FA is another. RJ makes money using FA. He has deep pockets by now but his principle remains FA. That doesn’t mean TA is a failed science. But as a professional trader I am trade mainly by swing trading and looking for the big scores. It depends at what level you apply your TA and make money. So believe in yourself and make money. Nothing is perfect. Even Buffett made a wrong FA call on GS two years ago.

  18. Long Gap…16th September to 2nd October…hope you are planning on posting something…pretty soon…

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