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Precious Metals: Trying to Board A Moving Train
As I was driving home one day several months ago I noticed that a large billboard had changed -- it sported a new advertisement for a local jewelry merchant, who decided it was time to remind folks in this corner of the world that "We Buy Gold!!"
That's my piece of anecdotal evidence regarding the newly-conspicuous popularity of gold & silver, and I'm sure most people have similar tales to tell. Enthusiasm is contagious, after all. The emotion for precious metals that was confined to the financial markets flowed into the public, and on to things like billboards. Mind you, the evidence of this psychology is more than anecdotal: one closely watched sentiment survey showed that at the March 2008 high, bullishness among market participants had reached an all-time high.
But enthusiasm is not the only contagious emotion, and an emotional surplus nearly always remains long after the price trend has turned -- not only do people end up trying to board a moving train, many don't even grasp that it's moving in the wrong direction. Far more people know about what silver was doing before the March peak, than are aware of the 40% decline during the five or so weeks that followed.
More to the point, the peak you see on the chart reflects an Elliott wave pattern at "multiple degrees of trend" -- in other words, large. What's more, the labeled price chart for silver in the current Short Term Update shows the textbook structure of the Elliott waves which have been unfolding since the reversal.
It's all online right now -- click here for the details.
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