Silver’s Volatility Is Flashing a Familiar Signal

By Elliott Wave International

Silver is living up to its reputation for volatility as the new year begins.

Silver’s one-month implied volatility has surged, a development that has historically coincided with important highs and lows in the metal’s price. Since 2020, similar volatility spikes have tended to appear near key turning points rather than during quiet, trending phases.

At the same time, the silver/gold ratio has also jumped, showing that silver began outperforming gold late in last year’s rally. In past cycles, sharp advances in this ratio have often accompanied tops in silver prices.

What makes the current setup notable is the interaction between these two measures. Spikes in volatility have frequently aligned with turning points in the silver/gold ratio, while spikes in the ratio itself have tended to appear near major price peaks.

Will history repeat once again — or is this rally still unfolding? Elliott wave analysis helps place these extremes into a broader market context and assess what typically comes next when conditions look like this.

Elliott Wave International has identified 18 charts that are flashing “warning” signals – check out their free report to prepare for what’s next..

This Chart Should Give Bulls a Fright

By Elliott Wave International Head of Global Research Murray Gunn

Happy Halloween!

The chart below should give a fright to bulls of the stock market.

It shows the Shiller Cyclically Adjusted Price Earnings Ratio (CAPE) for the U.S. stock market. The current reading is 39.5. This is the second highest reading in the history of the data going back to 1881, just below the all-time peak of 44.2 at the start of the new millennium. Even in 1929, just before the most famous stock market crash, CAPE only got to 32.5.

Of course, there’s no reason why earnings can’t explode higher rather than share prices decline in order for CAPE to fall back. AI bulls think that way. But if history is a guide, this overvaluation of the U.S. stock market will be corrected by a grizzly bear market in stocks.

If you are prepared, it shouldn’t be a horror show.

This is just one of many warning signs flashing across financial markets.

Discover the full picture inside EWI's new FREE report: “18 Flashing Red Signals.”.

This article was syndicated by Elliott Wave International and was originally published under the headline This Chart Should Give Bulls a Fright. EWI is the world's largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.