Silver Hones Downside Target (20.50 – 21.00/SI); Reinforces 4Q ’23 Rally Outlook.
06-28-23 – “2022/23 ushered in 40YC VIII – the 8th 40-Year Cycle since the culmination of the US War of Independence and the founding of America (1776 – 1781). As detailed many times, that 40-Year Cycle also encompassed a recurring ‘Currency War’ with culminating phases in 1816 – 1821, 1856 – 1861, 1896 – 1901, 1936 – 1941, 1976 – 1981 & 2016 – 2021.
The latest phase – in 2016 – 2021 – perfectly timed major advances in Gold & Silver (hard currency) and Bitcoin/cryptos (digital currency) as the Dollar Index (fiat currency) traded sideways… masking the underlying degradation taking place beneath the surface.
To begin 40YC VIII (2022), currencies were all set for a period-opening ‘head fake’ with the latest Bitcoin bubble projected to burst and Gold forecast to see a sharp sell-off (following its March ‘22 cycle highs) – the likely ‘c’ wave of a 2 – 3 year corrective phase.*
Dollar Swan Song?
At the same time, the US Dollar was projected to see a final surge (which began in mid-2021) – the completion of a 5-wave advance from its 2008 bottom and the culmination of its latest bull market.
With major upside targets at 110 – 113/DX, the Dollar (Index) was expected to begin this latest 40-Year Cycle with the completion of a major uptrend (also a kind of ‘head fake’*)… setting the stage for what was/is expected in 2023 – 2026… and beyond. (*See Tech Tip Reference Library excerpt on page 3, explaining the recurrence of this intra-period sequence.)
The Dollar Index achieved those upside price targets in 2022, completing a ~7-Year Cycle from an initial peak (double top) in 2015, two ~7-Year Cycles from the bottom in 2008, and three ~7-Year Cycles from the previous peak in 2001.
As stated then, that left very little remaining upside price potential for the Dollar Index’ overall bull market…
Window of Opportunity
As this is taking place, anti-Dollar instruments – like Gold & Bitcoin – have alternated rallying with both of them bottoming in Nov ’22, the same time the Dollar Index began a rapid sell-off while confirming a 3 – 6 month (minimum) peak.
In precise alignment with the Axiom on Market Correlation, that was/is another textbook example of how sometimes-correlated markets can trade. It is NOT that they top and bottom in tandem… at least not usually.
Instead, it is when the ‘lead’ market breaks key levels (or goes parabolic) that the ’lagging’ markets suddenly train all their attention on that ’lead’ market (setting aside their other governing fundamentals, at least temporarily) and react accordingly.
The Bigger Picture
Whether or not the Dollar Index makes it back to its 2022 high (which is steadily becoming a lesser probability as time goes on), the bigger picture has been anticipating a major shift in the US Dollar during this new 40-Year Cycle (VIII). After completing an overall ~23-year decline (1985 – 2008), the Dollar rebounded for 14 years (.618 of 23 years) and is poised to enter a new multi-year decline.
The first major low in that decline has already been discussed and comes into play during a 17-Year Cycle that comes into play in 2025/26 and portends a multi-year low (34 years from 1992 low and 17 years from 2008 low). 2025 is also the latest phase of the ~7-Year Cycle that produced multi-year Dollar lows in 2004, 2011 & 2018. Once a top is confirmed, more precise cycles (monthly, then weekly, etc.) should help hone that outlook. More on that to follow…
Gold & Silver peaked in perfect sync with cycle highs on May 3 – 5 and have been in corrective phases ever since. Those highs fulfilled ~3-month low-high-(high) and ~4-month low-high-(high) Cycle Progressions in Gold & Silver, while testing upside price targets at 2060 – 2080/GC & 26.50/SI.
That ushered in one of the two important cycle highs in 2023, the other projected for late-Oct/early-Nov ’23. Following the early-May peak, both declined and turned their weekly trends down – confirming that a 3 – 6 month peak was likely intact.
Silver also turned its intra-year trend back down and has traced out a negative weekly 21 MAC sequence since early-May ’23. Silver’s 2 – 3 month downside target is at 20.50 – 21.00/SI…
The early-May ‘23 peak reinforced the intra-year outlook, including ongoing analysis for another rally in 3Q or 4Q ‘23 – leading to an intra-year peak into late-Oct/early-Nov ‘23, the latest phase of a consistent ~9.5-month cycle that timed the March ‘22 peak and then the early-Jan ‘23 peak.
A high in early-Nov ‘23 would perpetuate an over-arching ~19-month high-high-high-(high) Cycle Progression in Silver & complete a ~1-year/~360-degree advance in Gold. The early-May ‘23 peak created a corroborating ~6-month/~180-degree low (early-Nov ‘22) – high (early-May ‘23) – high (early-Nov ‘23) Cycle Progression.
As is often the case, a large part of the next advance could occur toward the end of that cycle.”
The Dollar continues to show signs of a major multi-year peak as Gold & Silver slowly trace out a multi-year bottom. Precious Metals surged into early-May ’23, fulfilling upside price and time targets as well as the first of two decisive cycle highs in 2023.
From a broader perspective, the early-May ’23 peaks powerfully corroborated the other primary cycle focus for 2023 – the time frame in/around late-Oct/early-Nov ’23 when the next multi-month peak is projected. A majority of the preceding advance – leading into that expected peak – should occur in the weeks leading into a top (90/10 Rule of Cycles).
How Does Early-May Peak Corroborate Early-Nov ’23 Cycle Highs?
Is a New MAJOR Bull Market Unfolding? If so, When is a Breakout Likely??
How Are Interest Rates & Inflation Creating a Unique Opportunity?
Refer to the April 11, 2023 special issue of The Bridge – Gold, Silver and Elliott Wave Structure for expanded analysis that addresses some of those questions.
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.