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Last week’s Elliott wave analysis expected upwards movement to continue to about 17.30 in the first instance. So far upwards movement has continued as expected, reaching 0.56 short of the first target.

Summary: Upwards movement should still continue to about 17.30 in the first instance. However, weakness in volume and range does not support the new upwards wave, so it is essential that stops are used and risk is managed if trading this to the long side.

New updates to this analysis are in bold.

Last monthly chart is here.

ELLIOTT WAVE COUNTS

FIRST WAVE COUNT

WEEKLY CHART

Silver weekly 2017
Click chart to enlarge.

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. Intermediate wave (B) has met this minimum requirement; the rule for a flat correction is met. Intermediate wave (B) is longer than 1.05 times the length of intermediate wave (A) indicating this may be an expanded flat. Expanded flat corrections are the most common type. Normally their C waves are 1.618 or 2.618 the length of their A waves.

The target calculated would see primary wave Y to end close to 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.

While the combination wave count at the weekly chart level does not currently work for Gold, it does still work for Silver. They do not have to complete the same structures for cycle wave b, and fairly often their structures are different.

DAILY CHART

Silver daily 2017
Click chart to enlarge.

When the blue channel about intermediate wave (B) is breached by upwards movement, that shall add confidence in a trend change. Along the way up, the upper edge may provide some resistance. This may be where minor wave 3 ends.

If the upper edge of the channel does not provide much resistance, then it may still provide some support for any pullbacks along the way up.

Minor wave 4 may not move into minor wave 1 price territory below 15.858.

SECOND WAVE COUNT

WEEKLY CHART

Silver daily 2017
Click chart to enlarge.

Within a triangle, one of the sub-waves must be a more complicated multiple, usually a multiple zigzag. This may be complete for primary wave B.

Primary wave C upwards should unfold as a single zigzag that may not move beyond the end of primary wave A above 21.062. The A-C trend line is adjusted this week to see primary wave C reach a more normal length in relation to primary wave B. Along the way up, price may find some resistance at the lilac trend line.

Primary wave C must subdivide as a three wave zigzag, so within it there should be a big pullback for intermediate wave (B).

DAILY CHART

Silver daily 2017
Click chart to enlarge.

This wave count expects a shorter upwards wave than the first wave count.

Within the zigzag of primary wave C, intermediate wave (A) should subdivide as a five wave structure. That structure looks to be now close to completion. There is no adequate Fibonacci ratio between minor waves 3 and 1. This makes it more likely that minor wave 5 may exhibit a Fibonacci ratio to minor waves 1 or 3. The most common ratio for a fifth wave is equality in length with the first wave.

When price breaks below the lower edge of the blue Elliott channel, that shall indicate intermediate wave (A) complete and intermediate wave (B) underway.

Intermediate wave (B) may not move beyond the start of intermediate wave (A) below 15.197.

TECHNICAL ANALYSIS

WEEKLY CHART

Silver Chart Weekly 2017
Click chart to enlarge. Chart courtesy of StockCharts.com.

After what looked like a downwards breakout out of the consolidation zone, price has quickly reversed and re-entered the zone.

RSI indicates there is plenty of room for price to rise or fall.

During the consolidation, it is a downwards week which has strongest volume suggesting a downwards breakout may be more likely.

DAILY CHART

Silver Chart Daily 2017
Click chart to enlarge. Chart courtesy of StockCharts.com.

Upwards movement still looks weak. With Stochastics now overbought, look out for an end to this upwards movement, at least for a deeper pullback if not a trend change. If price drifts a little higher before it turns, there is good resistance above at 16.85.

Published @ 04:57 a.m. EST.