I want you to look at two things today.
First, I want you to look at a piece of “analysis” that was circulating right before the market ripped everyone’s face off. Second, I want to tell you what actually happened this weekend and why it had nothing to do with “conspiracies” and everything to do with stupidity.
Let’s start with the bedtime story.
The Predictive Delusion
Read the text below I came across on social media. It is a perfect specimen of the “predictive” disease that infects 99% of traders.
“Silver Update: Understanding Corrections with Elliott Wave”
There have been a lot of questions about what to expect next for Silver, so let’s walk through the structure.
The move down from roughly $121 to $74 unfolded as a clear 5 wave impulse. That matters.
In Elliott Wave, corrections do not complete in a 5 wave move. Five waves signal an impulsive leg, not a finished correction. That tells us it is extremely unlikely the corrective process is already over.
The most common corrective pattern is a ZigZag, which is made up of a 5 3 5 structure:
- Wave A: impulsive (5 waves)
- Wave B: corrective bounce (3 waves)
- Wave C: final impulsive leg down (5 waves)
Based on this:
- Yesterday’s sharp drop into ~$74 is most likely Wave A.
- We should now expect a Wave B recovery bounce.
- Once Wave B completes, we then look for Wave C down to finish the correction.
Only after the B wave top is confirmed can we properly project a high probability target zone for the Wave C low using Fibonacci relationships and structure.
So in simple terms:
- This bounce is likely corrective, not impulsive.
- Rallies during Wave B are typically choppy and overlapping.
- The higher probability path remains one more leg lower before the correction is complete.
This is exactly why structure matters. Rather than reacting emotionally to sharp moves, we let the wave count guide us. Elliott Wave does not predict. It frames probabilities and keeps you aligned with market structure.
Patience here is key. Let Wave B do its thing. Once that’s in place, the next roadmap becomes much clearer.
This is the process. This is disciplined technical analysis.”
The Reality Check
Did you enjoy the story? Because that is all it was.
While this analyst was drawing “ZigZags” and waiting for a “Wave B” that may never come, the market was busy destroying accounts.
Here is why this specific example is pure, unadulterated bullshit:
1. The “Roadmap” Illusion The writer claims, “Once that’s in place, the next roadmap becomes much clearer.” There is no roadmap. The market is not a geography class. It is a chaotic beast of human emotion and math. Thinking you have a map for tomorrow is the fastest way to get lost and broke, today.
2. Paralysis by Analysis Look at the advice: “Patience here is key. Let Wave B do its thing.” Translation: Don’t act. Wait for the picture to match my imaginary drawing. While you are sitting on your hands waiting for a “Wave B” to confirm your bias, the market is moving. Trends are happening now.
3. Complexity vs. Profit This analysis requires you to memorize patterns, count sub-waves, and trust invisible structures. Trend Following requires none of that. We don’t care if it’s Wave A, B, or Z. We care about one thing: Price.
- Is the price going down? Short it or get out.
- Is the price going up? Buy it.
Part 3: The “Manipulation” Excuse (What Actually Happened)
Now, let’s talk about the elephant in the room.
Friday: Silver crashes ~30% in a single session ($121 to $76). Sunday: Crypto bleeds out, with Bitcoin dumping below $80,000.
Immediately, the forums and chat rooms lit up with the favorite excuse of the losing trader: “It was the banks!” “It was the Fed nomination!” “They manipulated the close!”
Let’s be clear about what actually happened. It wasn’t a conspiracy. It was a Leverage Flush.
The Mechanics of the Slaughter When everyone is sitting on one side of the boat (long), and they are all using 10x, 20x, or 50x leverage, the market becomes fragile. All it takes is a small spark, maybe the Kevin Warsh nomination, maybe a Reuters headline, to hit the “stops” of the over-leveraged traders.
- Trader A’s stop is hit -> His position is sold.
- This selling drives the price down further.
- Trader B gets a margin call -> Forced liquidation.
- Trader C’s “tokenized silver” position on a crypto exchange gets wiped out.
It cascades. It is a domino effect. The banks didn’t have to “manipulate” anything; they just watched the dominos fall. The market was simply taking out the trash; clearing out the gamblers who were betting money they didn’t have.
Stop Blaming “Them” Blaming “manipulation” is a coping mechanism. It allows you to say, “I wasn’t wrong; the game is rigged.”If you believe the game is rigged, why are you playing? The truth is harder to swallow: You were over-leveraged. You were exposed. You were wrong.
While the Elliott Wave guy was measuring his “Fibonacci targets,” the market ripped the floor out. His “structure” didn’t stop the margin calls.
The Lesson: Price is the only truth. When the flush starts, you don’t ask “Is this manipulation?” You don’t ask “Is this Wave C?” You follow your rules. If your system says “Sell,” you sell. You survive the flush because you have risk management, not because you have a conspiracy theory.
The market doesn’t care about your leverage, and it certainly doesn’t care about your opinion on banks.
Adapt or die.
Michael Covel
Feedback in from a Market Wizard:
A colleague sent me your piece entitled “The Anatomy of a Slaughter.” Nicely done on how narrative can masquerade as analysis.
Thanks!
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