A target for upwards movement to end was at 16.13 to 16.23. The high for this week is 16.166, within the target zone.

Summary: A trend change may have occurred for Silver on Thursday. Confidence in a trend change may be had with a breach of the channel on the daily chart and then a new low below 15.169.

The next target is now at 10.02.

Monthly charts were reviewed here.

New updates to this analysis are in bold.

ELLIOTT WAVE COUNTS

MAIN WAVE COUNT

WEEKLY CHART – TRIANGLE

Click chart to enlarge.

This first wave count has good support from classic technical analysis, so it will be favoured. This wave count looks 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.

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 waves 1 and 2 may now both be complete.

If it continues higher, then primary wave 2 may not move beyond the start of primary wave 1 above 17.680.

Cycle wave c needs to move below the end of cycle wave a in order to avoid a truncation.

DAILY CHART – TRIANGLE

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Primary wave 2 may now be a complete zigzag. There are Fibonacci ratios between intermediate waves (A) and (C) and between all of minor waves 1, 3 and 5 within intermediate wave (C).

A best fit channel is drawn about primary wave 2. If price breaks below the lower edge of that channel, then some confidence that a high is in place may be had.

A new low now below 15.169 could not be a second wave correction within minor wave 5, so at that stage minor wave 5 would have to be over. That would add confidence in a trend change.

A target is calculated for primary wave 3 to reach the most common Fibonacci ratio to primary wave 1.

Primary wave 3 may only subdivide as an impulse. Within primary wave 3, no second wave correction may move beyond its start above 16.166.

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 0.96 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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If cycle wave II is over, then the new trend up for cycle wave III should begin with a five wave structure. This is labelled intermediate wave (1). The structure may now be complete.

Intermediate wave (2) may unfold over a few weeks. The most likely target for it would be the 0.618 Fibonacci ratio of intermediate wave (1).

Intermediate wave (2) may not move beyond the start of intermediate wave (1) below 13.882.

TECHNICAL ANALYSIS

WEEKLY CHART

Click chart to enlarge. Chart courtesy of StockCharts.com.

Price is within a strong zone of resistance and Stochastics is overbought and exhibiting bearish divergence. Caution is indicated with this upwards trend; look for reversal signals.

DAILY CHART

Click chart to enlarge. Chart courtesy of StockCharts.com.

The last three daily candlesticks do not complete a candlestick reversal pattern, but the last two in particular do look fairly bearish.

With ADX indicating an extreme upwards trend and both of Stochastics and RSI exhibiting bearish divergence, look out for a possible trend change here.

Published @ 09:35 p.m. EST on February 3, 2019.

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