Again, upwards movement has continued overall as expected.
The channel is now providing support. Targets remain the same.
Summary: Upwards movement is expected to continue. The target is at 24.219. This trend is now extreme, so stops must be used (as always).
New updates to this analysis are in bold.
WEEKLY WAVE COUNT
Click chart to enlarge.
Two first and second wave corrections may be complete. Silver may be in a strong third wave up.
When intermediate wave (3) is complete, then the following correction for intermediate wave (4) may not move into intermediate wave (1) price territory below 17.990.
Draw a base channel about intermediate waves (1) and (2) as shown. The upper edge is providing support now that price has broken above it. If price makes a deeper than expected correction here, then the upper edge of this channel should provide very strong support.
DAILY WAVE COUNT
Click chart to enlarge.
At 24.219 intermediate wave (3) would reach 2.618 the length of intermediate wave (1).
It looks like minor waves 1 through to 4 may now be complete within intermediate wave (3). The next wave up for minor wave 5 to end intermediate wave (3) may be swift and strong. It should be expected to end with a blowoff top.
Within minor wave 5, no second wave correction may move beyond its start below 19.214. Minute wave i is a complete impulse. Minute wave ii today is very likely complete. It may have found support at the upper edge of the base channel drawn about intermediate waves (1) and (2).
If targets are wrong, they may not be high enough. Silver, like all commodities, has a tendency of swift strong fifth waves. They are not necessarily extended in price, but they often are. Look out for surprises to the upside for this market at this time; blowoff tops commonly occur at the ends of third waves.
TECHNICAL ANALYSIS
WEEKLY CHART
Click chart to enlarge. Chart courtesy of StockCharts.com.
From the low in January, as price rises volume also rises and as price falls volume declines. The volume profile is bullish which supports the wave count. The last weekly candlestick here is incomplete; friday’s data will increase volume. Volume for this last weekly candlestick cannot yet be analysed.
A support line is added in cyan. If price again comes down to touch it, price should find strong support there.
A break above the purple line on On Balance Volume would be a bullish signal.
RSI is overbought but does not exhibit divergence with price. There is no indication of weakness at the weekly chart level at this stage.
DAILY CHART
Click chart to enlarge. Chart courtesy of StockCharts.com.
Overall, volume is declining as price is rising from 21st of July. This is concerning for the wave count because it does not support it. Price for the last two days has overall fallen to print two red daily candlesticks on increasing volume. This is also concerning for the wave count short term because it looks like this downwards movement is not complete.
ADX is declining, indicating the market is consolidating. ADX does not indicate a trend change: the +DX line remains above the -DX line. If a trend resumes, it would be upwards. ATR is also declining in agreement with ADX.
Trend lines on On Balance Volume are redrawn this week. A breakout of these lines may precede a direction for price.
RSI has just returned from overbought. There is a room for price to rise again.
Stochastics is just overbought. With ADX indicating the market is not trending, a downwards swing to support would be expected for price, to continue until Stochastics reaches oversold. This is contrary to expectations from the Elliott wave count.
This analysis is published @ 11:30 p.m. EST.
The opportunity I have been patiently waiting for has finally arrived. I have an extensive shopping list which I intend to acquire via naked puts sold against each stock I want to own. SWC, AG, GDX, SVCMF (no options), RGLD, GOLD, ABX, OR, SLW, FNV, NUGT.
Naked puts? 🙂
good on you Verne!
For less experienced members, do NOT try this at home. Watch and learn.
The only time to EVER use a naked put is when you intend to actually buy the underlying asset. This trade is not as gutsy as it first appears as I intend to take delivery of only 100 shares at a time of each position at my desired price, and gradually ladder into my full position. Lara is absolutely right – not for novices.