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Last week expected upwards movement for Silver. This is not what happened. Downwards movement remained above the invalidation point.

Summary: Upwards movement should continue. The target is 25.63 to 26.87. Volume remains mostly bullish. On Balance Volume may be giving a bullish signal but this needs to be clearer for confidence.

New updates to this analysis are in bold.


Silver weekly 2016
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Within primary wave 3, intermediate waves (1), (2) and (3) may be complete. Intermediate wave (4) may be unfolding.

Intermediate wave (4) may not move into intermediate wave (1) price territory below 17.990.

Intermediate wave (5) may be a swift sharp extension. It may end with a blowoff top.

A base channel about primary waves 1 and 2 is added this week. Intermediate wave (4) may find support about the upper edge.


Silver daily 2016
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Draw a channel about upwards movement using Elliott’s second technique: draw the first trend line from the ends of intermediate waves (2) to (4), then place a parallel copy on the end of intermediate wave (3). Intermediate wave (5) may end midway within the channel. Or if it is a swift strong fifth wave, it may end at the upper edge.

While intermediate wave (5) is unfolding, if this wave count is right, corrections should find support at the lower edge. The slightly higher lows for the last three sessions should continue. If this support line is correct, price should turn upwards from here.

At 25.63 primary wave 3 would reach 4.236 the length of primary wave 1.

At 26.87 intermediate wave (5) would reach 1.618 the length of intermediate wave (3). This gives a 1.24 target zone calculated at two wave degrees.

There is inadequate alternation between intermediate waves (2) and (4) because they are both subdividing as zigzags. There is some alternation so far within the structure: within intermediate wave (2) minor wave B was very brief and within intermediate wave (4) minor wave B is very time consuming. Intermediate wave (2) was a 0.68 correction of intermediate wave (1) and intermediate wave (4) is a 0.51 correction of intermediate wave (3), so there is no reasonable alternation in depth.

Minor wave 1 was over at last analysis; it did not continue a little higher. Minor wave 2 should now also be over. If it continues lower, it may not move beyond the start of minor wave 1. Before the invalidation point is passed any further downwards movement would now require a breach of the channel, which would substantially reduce the probability of this wave count before the invalidation point is passed.

Any long entries at this stage may set stops just below the trend line, reducing risk. Never invest more than 3-5% of equity on any one trade and always use a stop loss.


Silver daily 2016
Click chart to enlarge.

It is possible that primary wave 3 is already over. Intermediate wave (5) would be truncated by 0.294, which reduces the probability of this alternate.

Primary wave 3 has no adequate Fibonacci ratio to primary wave 1. At 20.953 primary wave 5 would reach equality in length with primary wave 1.

The maroon channel is drawn here using Elliott’s first technique: draw the first trend line from the end of primary wave 1 (see this on the weekly chart) to the end of primary wave 3, then place a parallel copy on the end of primary wave 2. Primary wave 4 may be finding some support about the lower edge of the channel. This may be where primary wave 5 begins.

Intermediate wave (2) may not move beyond the start of intermediate wave (1) at 18.39.



Silver Chart Weekly 2016
Click chart to enlarge. Chart courtesy of

The last two weeks of overall downwards movement have come with lighter volume than the prior upwards week. This current week is incomplete though, but with only one session left to go it does look like it may be lighter than the prior week. If it is, then that would offer support to the Elliott wave count.

On Balance Volume is providing a bullish signal at the weekly chart level with a move up and away from the support line.

RSI is not extreme. There is plenty of room for price to rise.


Silver Chart Daily 2016
Click chart to enlarge. Chart courtesy of

Movement up to the last swing high of 7th of September came on strong and increasing volume. Subsequent downwards movement has overall lighter volume.

Very light volume for the last session of 14th of September suggests that downwards movement may not be quite over. Price may find support about 18.50.

On Balance Volume has just turned up from the yellow support line. If it moves up tomorrow and the turn is clearer, this may be interpreted as a strong bullish signal. This support line is horizontal, reasonably long held and has been tested a few times. The turn needs to be stronger though because it is not completely clear exactly where the line should be drawn; there is a little leeway here.

ADX is declining, indicating the market is not currently trending. ATR is overall flat, mostly in agreement. Bollinger Bands are still contracting. With all three of these indicators in agreement, it is reasonable to conclude that this downwards movement is very likely a counter trend movement, that the longer term trend remains up.

RSI is just below neutral. There is plenty of room for price to rise again. There is no divergence between price and RSI to indicate weakness.

Stochastics is not extreme. Stochastics is returning from oversold but has not yet reached overbought and price has not yet reached resistance. A continuation of an upwards swing within a consolidating market would be a reasonable expectation. Price may find resistance about 20.90.

This analysis is published @ 04:22 a.m. EST.