20210930
Two weeks ago, I wrote:
...a weak, corrective rally that doesn’t get close to 23.36 would signify a selling opportunity with decent downside potential. We should know soon enough either way.
If I’d actually paid attention to this advice, I could have caught yesterday’s big drop. As you can see from the following 4-hour chart of /SI (silver futures), the signs were there for me to get short even as late as the end of the trading day on 9/28, and yet I missed it because I was too scared of a C-wave rally starting.
But that is in the past now, and after today’s action, we are once again at a crossroads. The whole decline from 24.94½ doesn’t quite look impulsive enough to strongly suggest further downside, but at the same time, it still looks too impulsive to think it’s wave B of a flat.
The big picture is a huge mess that suggests that said impulse may be (C) of ((Y)) of II, therefore all of II; but if it isn’t, it’s hard to tell just what alternative would make any sense.
If the red count is correct, then II may very well be over. But if the cyan count is correct, then this only resolves satisfactorily via far more downside (theoretically getting down to 11.65, remember!). It’s also worth mentioning at this point that all Ichimoku signals are still flashing bearish.
Sigh. At least the breaking below 21.81 means we’re not in a big triangle.
So once again we find ourselves in a situation where we might be ready for the big monster wave III up to begin. But to convince me that it was actually happening, bulls would need to do two things:
First break over 23.36 (overlapping 1 of (C), to mark the decline from 24.94½ as over). Normally I’d say 23.14, merely retracing all of wave 5; but the problem is that the decline from 23.14 has a three-wave look, so I won’t believe that any rally is more than ((c)) of a flat wave 4 until we get that key overlap. If this can be accomplished in an impulsive manner, then we can expect the rally to reach the 25 zone.
Then break over 26.09 to erase, fully, the high-volume plunge of 8/6 and 8/9.
But if the current rally fails to enlist any serious momentum, then the cyan count remains in play. Once again, we have a situation where a weak, corrective rally falling well short of 23.36 could be a selling opportunity. It’s less likely than last time, due to volume on this latest drop not matching the previous one and the fact that the decline from 24.94½ can now easily be counted as a complete impulse, but it’s still possible.
... and this time, I’m writing it right into my chart so I don’t forget.
