Silver has staged a hesitant recovery following the "plungelet" in early September which revealed the continuing fragility of this market following the vicious plunge back in April. On the plus side the price has, so far, remained above the parabolic uptrend visible on the 2-year chart. The sort of action we have seen this month, a sharp decline followed by a weak, hesistant recovery is normally followed by renewed decline.
It is now very important that silver succeeds in holding above its parabolic uptrend - this means that we don't want to see it break below $6. The bearish Elliott wavers maintain that the April plunge was an impulse wave, i.e. a wave in the direction of the primary trend, and that the subsequent rally is merely a bear market countertrend move. I can see the point that they are making and will be forced to agree with them should the long-term parabolic uptrend fail. Ferocious declines such as we witnessed in silver in April do normally kick off a longer-term downtrend, but not always. An outstanding example was the 1987 general market crash, which although a big deal at the time, now looks like nothing more than a blip in an otherwise relentless uptrend that continued right up to 2000. What will greatly improve the pattern and reduce risk substantially will be if silver can break above the clear strong resistance level at $7, at the top of the April gap. This is our buy signal, and will probably synchronize with a gold breakout above $430.