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Silver Seasonality In Sync with Intermediate Wave 2
Silver should have completed a five wave move down on Friday; if not, it should complete the down move on Monday or Tuesday. The Elliot wave pattern coincides with one of silver's most bullish seasonal patterns.
Over the past 54 years, silver has experienced some of its most significant annual gains between July 18 and September 21. If you bought and sold silver at these times every year over the past 54 years, you would have made a profit of 53.7% of the years with an annualized return of 21.12%. These are outstanding results for a trade window of only 6.5 weeks.
The results are even better if we restrict our seasonality research to the most recent 10 years. Over the past 10 years, silver has experienced some of its most significant annual gains between July 19 and September 3. The win rate of this period is 50%, with an annualized return of 80.84%.
While a win rate of 50-53.7% might not sound remarkable, this is the only time of the year when silver's seasonality is giving a historical annualized return of 21.12-80.84% for essentially a coin flip. And this year is far from a coin flip. Silver has retraced 32.31% over the past four months and has an oversold RSI reading below 30. This is also happening at a pivotal time in silver's Elliott wave structure due to moving from intermediate wave 1 to intermediate wave 2.
Over the next 5-6.5 weeks, silver should rise to somewhere between $21.635-$25.465 (between the 0.382 and 0.786 Fibonacci levels). I have marked three vertical lines on the chart. The green line is when silver starts its historical bullish seasonal pattern. The first red line is when silver has ended its bullish seasonality over the past 10 years. The second red line is when silver has finished its bullish seasonality over the past 54 years. The red boxes between the horizontal Fibonacci levels and the vertical seasonality lines represent the approximate profit-taking zone.
It's worth noting that while market seasonality can be very useful, there is no theoretical reason why it should repeat. Whereas there are theoretical reasons why Elliot waves exist and why oversold markets correct. Seasonality gives us a higher probability of making a profitable trade, but we must still watch the developing market structure rather than blindly following statistical patterns. We should get out when the market retraces a clear Elliot pattern and silver is no longer oversold, regardless of the price level.
Over the past 54 years, silver has experienced some of its most significant annual gains between July 18 and September 21. If you bought and sold silver at these times every year over the past 54 years, you would have made a profit of 53.7% of the years with an annualized return of 21.12%. These are outstanding results for a trade window of only 6.5 weeks.
The results are even better if we restrict our seasonality research to the most recent 10 years. Over the past 10 years, silver has experienced some of its most significant annual gains between July 19 and September 3. The win rate of this period is 50%, with an annualized return of 80.84%.
While a win rate of 50-53.7% might not sound remarkable, this is the only time of the year when silver's seasonality is giving a historical annualized return of 21.12-80.84% for essentially a coin flip. And this year is far from a coin flip. Silver has retraced 32.31% over the past four months and has an oversold RSI reading below 30. This is also happening at a pivotal time in silver's Elliott wave structure due to moving from intermediate wave 1 to intermediate wave 2.
Over the next 5-6.5 weeks, silver should rise to somewhere between $21.635-$25.465 (between the 0.382 and 0.786 Fibonacci levels). I have marked three vertical lines on the chart. The green line is when silver starts its historical bullish seasonal pattern. The first red line is when silver has ended its bullish seasonality over the past 10 years. The second red line is when silver has finished its bullish seasonality over the past 54 years. The red boxes between the horizontal Fibonacci levels and the vertical seasonality lines represent the approximate profit-taking zone.
It's worth noting that while market seasonality can be very useful, there is no theoretical reason why it should repeat. Whereas there are theoretical reasons why Elliot waves exist and why oversold markets correct. Seasonality gives us a higher probability of making a profitable trade, but we must still watch the developing market structure rather than blindly following statistical patterns. We should get out when the market retraces a clear Elliot pattern and silver is no longer oversold, regardless of the price level.
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