Price remained within the channel on the daily chart, so more upwards movement was allowed. With no channel breach, there is no indication of a trend change.
Summary: Use the pink Elliott channel on the first daily chart. If price breaks below the channel, expect the next wave down has begun. Stops may be set just above the last swing high. The target would be at 15.74.
If upwards movement continues a little further, it may end close to the 0.618 Fibonacci ratio at 17.613.
New updates to this analysis are in bold.
Last monthly chart is here.
ELLIOTT WAVE COUNT
FIRST WEEKLY CHART
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Cycle wave b may be completing as a double combination: zigzag – X – flat. The second structure, a flat correction for primary wave Y, may be underway.
Within a flat correction, intermediate wave (B) must retrace a minimum 0.9 length of intermediate wave (A) at 15.938. The common range for intermediate wave (B) is from 1 to 1.38 the length of intermediate wave (A).
Intermediate wave (B) may make a new price extreme beyond the start of intermediate wave (A), as in an expanded flat, which are very common structures.
The bigger picture for cycle wave b would expect primary wave Y to end about the same level as primary wave W about 21.062. The purpose of combinations is to take up time and move price sideways. To achieve this purpose the second structure in the double normally ends about the same level as the first.
The maximum number of corrective structures is three within combinations (and multiple zigzags). This maximum applies to sub-waves W, Y and Z. Within these structures, they may only be labelled as simple A-B-C corrections (or A-B-C-D-E in the case of triangles). They may not themselves be labeled multiples as that would increase the number of corrections within the structure beyond three and violate the rule.
X waves are joining structures and they are not counted in the maximum total of three (otherwise the maximum would be five). X waves may be any corrective structure, including multiples.
FIRST DAILY CHART
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Intermediate wave (B) may have continued higher as a double zigzag to take price closer to the 0.618 Fibonacci ratio of minor wave A. Minor wave B may not move beyond its start above 18.641.
The channel about minor wave B is drawn in the same way, but here it is now correctly termed a best fit channel. The bottom line remains that allow for the possibility that price could continue higher while it stays within this channel. Only when this channel is clearly breached by downwards movement, preferably a full daily candlestick below the lower edge and not touching it, would confidence in a trend change be reasonable.
At that stage, consider entering short, and look out for a curve up to back test prior resistance.
Always use a stop, in this case above the last swing high. Invest only 1-3% of equity on any one trade.
At this stage, a target is recalculated for minor wave C to end which would see intermediate wave (B) meet the minimum requirement for a flat correction, and now also see intermediate wave (B) reach down to within the common range for B waves within flat corrections.
SECOND WEEKLY CHART
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It is also possible that cycle wave b may be completing as a triangle. Only because combinations are more common than triangles is this a second wave count.
Within a triangle, only one of the sub-waves may be a more complicated multiple. Primary wave B subdivides as a double zigzag. Primary waves C, D and E may only be single threes.
Within a contracting or barrier triangle, primary wave C may not move beyond the end of primary wave A above 21.062.
To label primary wave C over at the last high of the 17th of April would see the A-C trend line too steeply sloped to have a normal look. It would be only a 0.55 length of primary wave B, which is unusually short for a triangle sub-wave. It would look more likely that primary wave C is not over.
Within a contracting triangle, primary wave D (nor any part of primary wave C) may not move beyond the end of primary wave B below 15.638.
Within a barrier triangle, primary wave D should end about the same point as primary wave B. As long as the B-D trend line remains essentially flat the triangle will remain valid. In practice, this means that primary wave D may move slightly below the end of primary wave B (this is the only Elliott wave rule which is not black and white).
The final wave of primary wave E may not move beyond the end of primary wave C. It would most likely fall short of the A-C trend line.
This second wave count expects a large consolidation to continue for months.
SECOND DAILY CHART
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Primary wave C may be an incomplete zigzag.
A new high above 18.641 would at this stage invalidate the first wave count and provide some confirmation of this second wave count.
A new low reasonably below 15.638 would see this second wave count invalidated and the first wave count increase in probability.
Upwards movement needs to overall continue here for this wave count to retain the right look. Upwards movement should also show an increase in momentum and have support from volume as a third wave upwards unfolds. Upwards movement at this stage looks weak. If weakness persists, this wave count would not have the right look.
TECHNICAL ANALYSIS
WEEKLY CHART
Click chart to enlarge. Chart courtesy of StockCharts.com.
Volume is now strongest during an upwards week. This suggests an upwards breakout from the trading range is more likely than downwards.
Overall, Silver is now in a large consolidation at the weekly chart level. Support is about 16.05 – 15.70 and resistance is about 18.55 – 18.65. ADX agrees that price is consolidating.
A new resistance line is drawn this week for On Balance Volume. This line may assist to halt the rise in price here.
Volume is now declining as price moves lower for the last two weeks. The 40 week (200 day) moving average may offer resistance.
DAILY CHART
Click chart to enlarge. Chart courtesy of StockCharts.com.
Prior resistance about 17.30 may now be support. The long lower wicks on the last two daily candlesticks are bullish. Declining volume is bearish. On Balance Volume gives a weak bearish signal with a move down from resistance today.
Bollinger Bands may be beginning to widen. It would be bullish if this continues as price moves higher.
This analysis is published @ 02:22 a.m. EST on 1st June, 2017.