Last week expected to see Silver either consolidate sideways or bounce higher. Upwards movement is not unexpected.
Summary: Look now for price to bounce higher to test resistance about 15.65. The bounce may last several weeks.
The larger trend remains down until proven otherwise.
Monthly charts were reviewed here.
New updates to this analysis are in bold.
ELLIOTT WAVE COUNTS
MAIN WAVE COUNT
WEEKLY CHART – TRIANGLE
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This first wave count has good support from classic technical analysis, so it will be favoured. This wave count looks highly likely.
The first wave count expects that the bear market, which began from the April 2011 high, is incomplete.
Cycle wave a is seen as a five wave impulse for this main wave count. There are multiple corrective structures possible still for cycle wave b.
This first weekly chart sees cycle wave b as a now possibly complete regular contracting triangle.
Primary wave E of the triangle may have ended with an overshoot of the A-C trend line.
Within cycle wave c, primary wave 1 may be an incomplete impulse. Within primary wave 1, intermediate waves (1), (2) and (3) may now be complete. This week the wave count is changed to see the current bounce one degree higher.
Intermediate wave (4) may not move into intermediate wave (1) price territory above 16.173.
Intermediate wave (2) was a flat correction lasting ten weeks. Intermediate wave (4) may most likely be a zigzag and may last a Fibonacci five, eight or thirteen weeks.
DAILY CHART – TRIANGLE
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Intermediate wave (4) may begin with a five up on the daily chart if it subdivides as a zigzag. So far only minute waves i and ii may be complete.
Intermediate wave (4) may end about either the 0.382 or 0.618 Fibonacci ratios of intermediate wave (3).
Intermediate wave (4) would be most likely to break out of the blue channel that contains intermediate wave (3).
WEEKLY CHART – COMBINATION
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Cycle wave b may still 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) has now met and passed the minimum 0.9 length of intermediate wave (A) at 15.938.
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.
Intermediate wave (B) may be over. Intermediate wave (C) may now begin as a large five wave motive structure higher. A target is calculated for intermediate wave (C) that expects it to end reasonably close to the 21.062, so that primary wave Y ends about the same level as primary wave W.
DAILY CHART – COMBINATION
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Within the zigzag of minor wave Y, minute wave c may be a complete five wave structure.
A new high above 16.173 would invalidate the first triangle wave count and offer some confidence in this combination wave count. At that stage, the downwards breakout may be considered false and a new upwards wave may be underway. This wave count does not have good support from classic technical analysis.
ALTERNATE WAVE COUNT
WEEKLY CHART – BULL WAVE COUNT
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Cycle wave II may be a complete double zigzag. Cycle wave II would be very deep at 0.95 of cycle wave I. This is typical behaviour for the first second wave correction within a new trend for commodities.
If it continues any further, then cycle wave II may not move beyond the start of cycle wave I below 13.569.
DAILY CHART – BULL WAVE COUNT
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A five wave impulse for intermediate wave (C) may be complete for this wave count.
This wave count now has a little support from classic technical analysis.
TECHNICAL ANALYSIS
WEEKLY CHART
Click chart to enlarge. Chart courtesy of StockCharts.com.
Silver has seen a classic downwards breakout from the shaded support zone, which then provided resistance for a small back test. It is possible that another back test may come.
ADX is giving the strongest signal it can give, rising from a low level below both directional lines. The trend is not yet extreme.
It looks like for the short to mid term a low is in place; the Morning Doji Star candlestick reversal pattern should be given reasonable weight here, especially as it is now followed by a strong upwards week.
It is possible that price may now consolidate or bounce up to test resistance at prior support.
A target from the breakout of the symmetrical triangle is about 12.08.
DAILY CHART
Click chart to enlarge. Chart courtesy of StockCharts.com.
Next resistance is about 14.80, and for the mid term final resistance may be about 15.60.
Look for upwards movement to overall continue next week.
Published @ 06:02 p.m. EST on 29th September, 2018.
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