Again, last week members were warned to look out for the potential for a short-term pullback. Price has moved to a new swing low, so a new Elliott wave count is developed that has support from volume analysis.
Summary: Strong downwards movement with push from volume suggests a more bearish Elliott wave count. A new low below 16.195 would invalidate bullish alternates and provide confidence in a bearish outlook.
ELLIOTT WAVE COUNTS
Last updated monthly charts may be found here.
BEARISH WAVE COUNT
Super Cycle wave (b) may be a complete double zigzag.
The first zigzag in the double is labelled cycle wave w. The double is joined by a three in the opposite direction, a zigzag labelled cycle wave x that is atypically very deep.
The second zigzag in the double is labelled cycle wave y. Cycle wave y has failed by a very wide margin to achieve its purpose of deepening the correction, nor has cycle wave y managed to move beyond the end of cycle wave w. This is not technically a truncation (truncations refer only to C and fifth waves), but the effect is the same.
This wave count this week has strong support from classic analysis. That is the only reason why it is this week a main wave count despite the problems in terms of Elliott wave structure.
Super Cycle wave (c) should move beyond the end of Super Cycle wave (a) below 14.063 to avoid a truncation. Super Cycle wave (c) must subdivide as a five wave structure.
Within intermediate wave (3), no second wave correction may move beyond its start above 18.702.
Within the new downwards trend, primary wave 1 may be incomplete.
Within primary wave 1, intermediate waves (1) and (2) may be complete. Intermediate wave (3) may have begun.
Within intermediate wave (3), minor waves 1 and 2 may be complete. Within minor wave 3, minute wave iv may not move into minute wave i price territory above 17.606.
Look out for the possibility that one or both of minute wave v and minor wave 5 may end with very strong downwards movements. Silver, typical of commodities, exhibits swift strong fifth waves. This tendency is especially prevalent in its fifth waves to end third wave impulses one degree higher.
ALTERNATE WEEKLY CHART
Super Cycle wave (b) may be an incomplete regular flat correction.
Within the regular flat correction, cycle wave a subdivides well as a zigzag and cycle wave b subdivides well as a zigzag, which is a 0.96 correction of cycle wave a.
Cycle wave c must complete as a five wave structure. Within cycle wave c, primary waves 1 through to 4 may be complete. If it continues any further, then primary wave 4 may not move into primary wave 1 price territory below 16.195. Primary wave 4 may have continued lower this week as a double zigzag.
Regular flat corrections often fit within parallel channels. Cycle wave c may end about resistance at the upper edge of the channel. The most common Fibonacci Ratio for cycle wave c within a regular flat would be equality in length with cycle wave a.
It would be extremely likely, for this wave count, for cycle wave c to move at least slightly above the end of cycle wave a at 21.062 to avoid a truncation.
Within cycle wave c, primary waves 1 and 3 both lasted 14 weeks, one longer than a Fibonacci 13. Primary wave 5 may last a total Fibonacci 8 or 13 weeks.
ALTERNATE DAILY CHART
Cycle wave C may be subdividing as an impulse. Within the impulse, primary waves 1 to 4 may be complete. Primary wave 4 may have continued lower this week as a double zigzag.
If it continues any further, then primary wave 4 may not move into primary wave 1 price territory below 16.195.
Primary wave 2 lasted 69 sessions and subdivided as a deep 0.82 double zigzag. If it is complete as labelled, then primary wave 4 may have exhibited almost no alternation as a double zigzag and more shallow at 0.54 of primary wave 3.
Primary wave 4 would still be more brief than primary wave 2; fourth waves for Silver tend to be more brief than counterpart second waves.
Primary wave 5 must subdivide as a five wave structure.
BULLISH WAVE COUNT
This bullish Elliott wave count sees a new bull market beginning for Silver at the low in December 2015.
A new bull market should begin with a five wave structure upwards. This is labelled cycle wave I.
Following five steps forward should be three steps back. This is labelled cycle wave II. The Elliott wave corrective structure of cycle wave II is labelled as a double zigzag, which is a fairly common structure.
Cycle wave III may only subdivide as an impulse. Within cycle wave III, only primary wave 1 may be unfolding. Within primary wave 1, intermediate wave (4) may not move into intermediate wave (1) price territory below 16.195.
A target is calculated for primary wave 1 to end.
Cycle wave III must move beyond the end of cycle wave I above 21.062. Cycle wave III must move far enough above this point to allow room for cycle wave IV to unfold and remain above cycle wave I price territory.
Both this bullish Elliott wave count and the bearish alternate Elliott wave count now expect a fourth wave has completed. The targets for the next upwards movement are different.
Click chart to enlarge. Chart courtesy of StockCharts.com.
Silver is back within a strong area of resistance and support, identified by blue shaded areas.
This week completes a huge bearish candlestick with strong push from volume. With a reversal pattern at the last high and now ADX indicating an extreme upwards trend may have ended, a new bearish Elliott wave count is required.
Click chart to enlarge. Chart courtesy of StockCharts.com.
Downwards movement has push from volume. Strength is indicated by some increase in ATR. ADX is bearish.
The divergence with price and On Balance Volume at this week’s low is so very slight that it shall be given almost no weight in this analysis. The bearish break below support should be given more weight.
Published @ 04:26 p.m. EST on November 9, 2019.
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New updates to this analysis are in bold.