It is time to step back and look at monthly charts for Silver, including a new alternate that is in line with Gold analysis.
Summary: A small downwards wave to about 16.686 – 16.617 is expected, then a final last upwards thrust to a new high above 17.330.
At that point the wave counts diverge.
New updates to this analysis are in bold.
ELLIOTT WAVE COUNTS
MAIN WAVE COUNT
Grand Super Cycle wave I may have ended at the last high. That may also be the end of a Grand Super Cycle wave III, to be in line with Gold analysis (but for Silver there is not as much historic data available).
Either way, the structure may be the same whether this be a second or fourth wave correction.
The Grand Super Cycle correction may be an incomplete flat or combination, with Super Cycle wave (a) downwards an incomplete zigzag.
Within the zigzag, cycle wave b may have just ended as a triangle. Cycle wave c may now begin.
The triangle may now be almost complete. Primary wave E may end with an overshoot of the A-C trend line as it is very close to that line now.
At its end, primary wave E may look like a three wave structure here at the weekly chart level.
Primary wave E may not move beyond the end of primary wave C above 18.207.
Intermediate wave (B) may be an incomplete flat correction. This wave count fits all subdivisions.
Minor wave B fits on the hourly chart very well as a zigzag. It is difficult to see this wave up as a complete five, so it would be very difficult to see this as intermediate wave (C).
Minor wave C would be very likely to make at least a slight new low below the end of minor wave A at 16.881 to avoid a truncation and a very rare running flat.
The target calculated for intermediate wave (B) to end would see minor wave C reach about 1.618 the length of minor wave A, and intermediate wave (B) end close to the 0.382 Fibonacci ratio of intermediate wave (A).
Thereafter, intermediate wave (C) should move above the end of intermediate wave (A) at 17.330 to avoid a truncation.
Primary wave E may be over in a few more sessions.
Thereafter, this wave count expects a trend change at cycle degree.
A target for cycle wave c to end may be calculated when the possible start of it is known. That cannot be done yet.
SECOND WAVE COUNT
Both the first and second wave counts see the large fall in price from April 2011 to December 2015 as a five wave structure. Thereafter, they differ on what structure cycle wave b may be taking.
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.
At this stage, the duration of minor wave 2 now looks wrong. This wave count is now less likely.
Minor wave 3 may only subdivide as an impulse and must move above the end of minor wave 1 at 18.207.
Minute wave i may be complete within the impulse of minor wave 3. Minute wave ii may not move beyond the start of minute wave i below 15.525.
At this stage, the structure for minute wave ii is seen in the same way as intermediate wave (B) for the first wave count. Both wave counts see this piece of movement as a possible incomplete flat correction.
The target for minor wave 3 expects the most common Fibonacci ratio to minor wave 1.
ALTERNATE WAVE COUNT
This alternate wave count looks at the possibility that the large downwards wave may have been a double zigzag and may be the complete correction. A new bull market may have begun to last generations at the low in December 2015.
Within the new bull market, cycle wave II (if it continues further) may not move beyond the start of cycle wave I below 13.569.
A series of two overlapping first and second waves may now be complete for cycle waves I and II, and primary waves 1 and 2.
A third wave now at two large degrees may be beginning.
Targets calculated for third waves assume the most common Fibonacci ratios to their respective first waves. As price approaches each target, if the structure is incomplete or price keeps rising through the target, then the next Fibonacci ratio in the sequence would be used to calculate a new target.
Within primary wave 3, no second wave correction may move beyond the start of its first wave below 15.525.
The large base channel about cycle waves I and II nicely shows where primary wave 2 found support. A lower degree second wave correction should find support (in a bull market) about a base channel drawn about a first and second wave one or more degrees higher.
For the short term, all wave counts expect the same movement next. An expanded flat correction is here labelled intermediate wave (2).
Minor wave C would be very likely to move at least slightly below the end of minor wave A at 16.881 to avoid a truncation and a very rare running flat.
The target zone would see minor wave C end about 1.618 the length of minor wave A, and intermediate wave (2) end about the 0.382 Fibonacci ratio of intermediate wave (1).
The lower edge of the base channel is slightly overshot but not breached. Intermediate wave (2) may be expected to find support about the lower edge of the base channel if it gets that low.
A breach of the base channel at the daily chart level would substantially reduce the probability of this wave count.
Intermediate wave (2) may not move beyond the start of intermediate wave (1) below 15.525.
Click chart to enlarge. Chart courtesy of StockCharts.com.
It looks like at this time frame Silver is turning prior to resistance. On Balance Volume gives a bearish signal while Stochastics is overbought.
Click chart to enlarge. Chart courtesy of StockCharts.com.
Silver today looks clearer than Gold. It looks like Silver is turning.
RSI and Stochastics both reached overbought, and then both developed strong divergence with price at highs. ADX reached extreme at the same time.
Next support is about 16.85 and below that about 16.15.
Published @ 10:14 p.m. EST.