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SILVER Elliott Wave Technical Analysis – 16th November, 2017

Price was expected to move higher, but sideways movement suggests a triangle is forming for the short term.

Two Elliott wave triangle counts are considered, and the classic symmetrical triangle is examined in this analysis.

Summary: A triangle may be either complete or complete very soon. Watch for the breakout; it may come within a few days. Some trading guidance for triangles is given from Dhalquist and Kirkpatrick in the classic technical analysis section.

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.

For this first wave count, upwards movement for intermediate wave (C) must subdivide as a five wave structure. It may be unfolding as an impulse.

Within the impulse of intermediate wave (C), only minor wave 1 was over at the last high and now minor wave 2 may now be complete.

Minor wave 2 may have ended very close to the most likely point of the 0.618 Fibonacci ratio of minor wave 1 at 16.347.

Minor wave 1 lasted 44 days. Minor wave 2 may have completed in 20 days, just one short of a Fibonacci 21.

Minor wave 3 may only subdivide as an impulse. It would be very likely to show its subdivisions clearly at the daily chart level. Minute waves ii and iv within it should show up as multi day pullbacks or sideways consolidations. Minute wave ii now shows up at the weekly and daily chart levels.

Within minute wave iii, no second wave correction may move beyond its start below 16.602.

A base channel is added to minor waves 1 and 2. Downwards movement is finding very strong support at the lower edge of this base channel. If price breaks below the base channel, then the probability of this wave count would substantially reduce prior to invalidation.

This wave count now expects to see a strong increase in upwards momentum as a third wave up at three degrees unfolds. The fact that strong upwards movement has failed so far to materialise must reduce the probability now of this wave count.

SECOND WAVE COUNT

WEEKLY CHART

Silver daily 2017
Click chart to enlarge.

It remains possible for Silver that a large regular contracting or regular barrier triangle may be completing.

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 may now be complete. The upper A-C trend line does have a fairly steep slope though, so it must be accepted that primary wave C may not be over and may continue higher. If it does, it may not move beyond the end of primary wave A above 21.062.

Primary wave C must subdivide as a three wave zigzag.

This triangle wave count now expects that primary wave D downwards may now be underway. Two scenarios for how it subdivides are presented below at the daily chart level.

Primary wave D of a contracting triangle may not move beyond the end of primary wave B below 15.197.

Primary wave D of a barrier triangle may end about the same level as primary wave B at 15.197; as long as the B-D trend line is essentially flat, the triangle will remain valid. Unfortunately, there is some subjectivity in this rule; it is not black and white.

DAILY CHART

Silver daily 2017
Click chart to enlarge.

Primary wave D must subdivide as a zigzag. Within the zigzag, intermediate wave (B) may be any corrective structure. At this stage, it may be a complete regular contracting triangle.

Minor wave E slightly overshoots the A-C trend line. Sometimes triangles end with a small overshoot.

If price begins to move strongly lower and makes a new low below 16.602, then confidence may be had in this wave count.

The target for primary wave D expects to see the most common Fibonacci ratio between intermediate waves (A) and (C).

ALTERNATE DAILY CHART

Silver daily 2017
Click chart to enlarge.

When an Elliott wave triangle is considered, it is vital to always consider alternate ways to label the triangle.

The triangle may be minor wave B within intermediate wave (B). The breakout may be upwards.

Within the triangle, minute wave e may not move beyond the end of minute wave c. A new low below 16.814 would invalidate this triangle idea and add some confidence to the main wave count above.

Within the zigzag of intermediate wave (B), minor wave C would be very likely to make at least a slight new high above the end of minor wave A at 17.094 to avoid a truncation.

TECHNICAL ANALYSIS

WEEKLY CHART

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

The strongest week during this large consolidation is a downwards week ending 12th of June. However, this is stronger by only a small margin. The next strongest week is an upwards week. It may be better to look at daily volume bars to determine the most likely direction of a breakout from this consolidation.

The last two completed weeks moved price higher with an increase in volume. This is bullish.

Another weak bullish signal comes this week from On Balance Volume.

This chart supports the first and second alternate Elliott wave counts.

DAILY CHART

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

Volume suggests an upwards breakout from the symmetrical triangle.

The last day though is very bearish. The long upper wick is bearish as is volume.

From Dhalquist and Kirkpatrick regarding symmetrical triangles:

“The breakout is usually upwards (54% of the time). Symmetrical triangles have many false breakouts and must be watched carefully. The breakout commonly occurs between 73% and 75% of the length of the triangle from base to cradle. Throwbacks and pullbacks occur 37% and 59% of the time respectively, and, as in most patterns, when they occur, they detract from eventual performance. This implies that for actual investment or trading, the initial breakout should be acted upon, and if a pullback or throwback occurs, the protective stop should the tightened.”

And regarding trading triangles:

“The ideal situation for trading triangles is a definite breakout, a high trading range within the triangle, an upward-sloping volume trend during the formation of the triangle, and especially a gap on the breakout.

Although triangles are plentiful, their patterns suffer from many false and premature breakouts. This requires that a very strict breakout rule be used, either a wide filter or a number of closes outside the breakout zone. It also requires a close protective stop at the breakout level in case the breakout is false. Once these defensive levels have been exceeded, and price is on its way, the trader can relax for a little while because the failure rate after a legitimate breakout is relatively low Trailing stops should then be placed at each preceding minor reversal.”

For the example in the chart above, a breakout is required either above (54% likely) or below the trend lines. It should come soon now as price is close to about 75% the length of the triangle. It will be there in about two more days.

A gap on the breakout would increase performance. Volume supporting movement would also provide confidence. Stops may be set just above or below the triangle trend lines; below if an upwards breakout or above if a downwards breakout occurs. A position should be entered on the breakout, but do not wait for a throwback or pullback as it may not come.

Published @ 01:11 a.m. EST.

[Note: Analysis is public today for promotional purposes. Specific trading advice and comments will remain private for members only.]

Continue reading SILVER Elliott Wave Technical Analysis – 16th November, 2017

SILVER Elliott Wave Technical Analysis – 12th October, 2017

Last analysis expected a little more downwards movement to either 16.347 or possibly as low as 15.799 – 15.649. The low came one day after last analysis was published at 16.311, just 0.038 below the first target.

Continue reading SILVER Elliott Wave Technical Analysis – 12th October, 2017

SILVER Elliott Wave Technical Analysis – 5th October, 2017

More downwards movement was expected after last week’s analysis. Silver has made a new low, which fits expectations so far.

With this market in a large consolidation, volume analysis will be used to indicate the breakout direction.

Summary: Downwards movement has support from classic technical analysis. The target is at either 16.347 or as low as 15.799 – 15.649.

It is possible that a bounce may unfold about here for Silver, but the low does not look to be in place yet.

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.

For this first wave count, upwards movement for intermediate wave (C) must subdivide as a five wave structure. It may be unfolding as an impulse.

Within the impulse of intermediate wave (C), only minor wave 1 was over at the last high and now minor wave 2 may be unfolding. Minor wave 2 may not move beyond the start of minor wave 1 below 15.197.

The most likely point for minor wave 2 to end may be the 0.618 Fibonacci ratio of minor wave 1 at 16.347.

Minor wave 1 lasted 44 days. Minor wave 2 so far has lasted 19 days. It would be likely to continue further, so that it has better proportion to minor wave 1. A Fibonacci 21 or 34 days may be expected at this stage.

SECOND WAVE COUNT

WEEKLY CHART

Silver daily 2017
Click chart to enlarge.

It remains possible for Silver that a large regular contracting or regular barrier triangle may be completing.

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 may now be complete. The upper A-C trend line does have a fairly steep slope though, so it must be accepted that primary wave C may not be over and may continue higher. If it does, it may not move beyond the end of primary wave A above 21.062.

Primary wave C must subdivide as a three wave zigzag.

DAILY CHART

Silver daily 2017
Click chart to enlarge.

Primary wave C now looks complete and primary wave D downwards looks to have begun for this wave count. Primary wave D downwards must subdivide as a zigzag, which subdivides 5-3-5.

Primary wave D of a contracting triangle may not move beyond the end of primary wave B below 15.197.

Primary wave D of a barrier triangle may end about the same level as primary wave B at 15.197; as long as the B-D trend line is essentially flat, the triangle will remain valid. Unfortunately, there is some subjectivity in this rule; it is not black and white.

Within primary wave D, intermediate wave (A) now looks like a complete impulse. Intermediate wave (B) may now bounce higher up to the 0.382 or 0.618 Fibonacci ratios of intermediate wave (A).

It would be extremely unlikely for this wave count that intermediate wave (B) is over already. It should last at least two weeks and quite likely longer, so that it has reasonable proportion to intermediate wave (A).

Intermediate wave (B) should break out above the channel that contained intermediate wave (A).

Intermediate wave (B) may not move beyond the start of intermediate wave (A) above 18.207.

TECHNICAL ANALYSIS

WEEKLY CHART

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

Price is still within a large consolidation zone. Volume remains relatively strong. So far, within the consolidation, it is only now one downwards week that has strongest volume suggesting a downwards breakout eventually is more likely than upwards. However, the difference is very slight between this week and the next strongest week which was an upwards week, so the signal is not a clear one.

Support is some distance away. There is room for price to fall further here.

The bearishness of the long upper wick on the last completed weekly candlestick may now be resolved by this current week making a new low. How this current candlestick closes may offer a clue as to how next week may unfold.

DAILY CHART

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

At the daily chart level, during the most recent consolidation which began back in July, it is an upwards day of the 5th of September that has strongest volume suggesting an upwards breakout is more likely than downwards.

The volume profile is bearish for the very short term, but overall as price falls volume is declining. The low does not look to be in place yet, but it may be near.

For the short term, On Balance Volume is also bearish.

Published @ 10:52 p.m. EST.

[Note: Analysis is public today for promotional purposes. Specific trading advice and comments will remain private for members only.]

Continue reading SILVER Elliott Wave Technical Analysis – 5th October, 2017

SILVER Elliott Wave Technical Analysis – 27th July, 2017

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.

Continue reading SILVER Elliott Wave Technical Analysis – 27th July, 2017

SILVER Elliott Wave Technical Analysis – 29th June, 2017

Stops should have been set just above 16.726. If they were set, they were triggered on the 23rd of June closing short positions for a profit.

Summary: Silver is range bound with support about 16.05 – 15.70 and resistance about 18.55 – 18.65. Currently, it looks like a downwards swing has ended and an upwards swing is in its early stage.

New updates to this analysis are in bold.

Last monthly chart is here.

ELLIOTT WAVE COUNT

FIRST 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. The common range for intermediate wave (B) is from 1 to 1.38 the length of intermediate wave (A). The target calculated would see intermediate wave (B) reach to within the common range and pass its minimum requirement. If minor wave B moves any higher, then the target for intermediate wave (B) must also move correspondingly higher.

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.

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.

FIRST DAILY CHART

Silver daily 2017
Click chart to enlarge.

A strong breach of the channel drawn in last analysis began on the 23rd of June and indicated that the last wave down for minute wave i was over.

Minute wave ii may now also be over, or it may continue further sideways or higher. If it does continue higher, it should find strong resistance at the upper edge of the Elliott channel.

When minute wave ii is complete, then downwards movement should show an increase in momentum for minute wave iii.

Minute wave ii may not move beyond the start of minute wave i above 17.742.

SECOND WEEKLY CHART

Silver daily 2017
Click chart to enlarge.

It is also possible that cycle wave b may be completing as a triangle. Mostly 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

Silver daily 2017
Click chart to enlarge.

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.

Minor wave 2 may now be complete. Minor wave 3 may be underway.

This second wave count does not have support from this week’s classic technical analysis, so it is less likely than the first wave count.

Within minor wave 3, no second wave correction may move beyond its start below 16.368.

TECHNICAL ANALYSIS

WEEKLY CHART

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

Volume now suggests a downwards breakout from the trading range is more likely than upwards.

Overall, Silver is 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.

The long lower wick on the last completed weekly candlestick is bullish. The last downwards swing within the consolidation now looks likely to be over, so an upwards swing may now be in its early stages and may last a few weeks.

DAILY CHART

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

The very long lower wick on the candlestick for the 26th of June is very bullish; it completed a Hammer candlestick reversal pattern. It looks like a low is in place at least short term.

Volume is not at this time supporting upwards movement. That may change but for now this should be read as bearish.

The long upper wick on the last daily candlestick is bearish for the short term. Look for a red daily candlestick for Silver tomorrow.

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This analysis is published @ 01:33 a.m. EST.

[Note: Analysis is public today for promotional purposes. Member comments and discussion will remain private.]

Continue reading SILVER Elliott Wave Technical Analysis – 29th June, 2017