SILVER: Elliott Wave and Technical Analysis | Charts – January 10, 2020
Silver was expected to continue to move higher this week. Price did make a new high. Downwards movement at the end of the week remains above the short-term Elliott wave invalidation point.
Summary: The target for upwards movement to end is now at 21.375.
An alternate wave count again this week looks at the possibility that Silver may have found a high at the same time as Gold. Confidence in this view may be had if price makes a new low below 16.523.
ELLIOTT WAVE COUNTS
Last updated monthly charts may be found here.
BEARISH WAVE COUNT
WEEKLY CHART
Click chart to enlarge.
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.
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 4 has now lasted 14 weeks.
DAILY CHART
Click chart to enlarge.
Cycle wave C may be subdividing as an impulse. Within the impulse, primary waves 1 to 4 may be complete.
Primary wave 5 must subdivide as a five wave structure. Within primary wave 5, so far intermediate wave (1) may have ended at this week’s high. Intermediate wave (2) may not move beyond the start of intermediate wave (1) below 16.523.
ALTERNATE WEEKLY CHART
Click chart to enlarge.
This alternate has been published before.
This alternate bearish wave count looks at the possibility that Gold and Silver may have found the last high together and may now both be in a new downwards trend.
If Super Cycle wave (b) is complete, then it may have subdivided as a double zigzag. The second zigzag in the double labelled cycle wave y has failed to achieve its purpose of deepening the correction; it has not given Super Cycle wave (b) an upwards slope. Cycle wave y has failed to move beyond the end of cycle wave w. This is not correctly technically a truncation (the term truncation refers only to 5th and C waves), but the effect is the same. This reduces the probability of this wave count.
If the main bearish wave count published above is invalidated with a new low below 16.523 by any amount at any time frame, then this alternate wave count would become the main wave count.
BULLISH WAVE COUNT
WEEKLY CHART
Click chart to enlarge.
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 waves (1) through to (4) may now be complete. Within intermediate wave (5) no second wave correction may move beyond its start below 16.523.
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.
DAILY CHART
Click chart to enlarge.
Both this bullish Elliott wave count and the bearish Elliott wave count now expect a fourth wave has completed. The targets for the next upwards movement are different.
TECHNICAL ANALYSIS
WEEKLY CHART
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.
For the short term, Silver now looks more clearly bearish.
DAILY CHART
Click chart to enlarge. Chart courtesy of StockCharts.com.
The upwards trend became extreme and now a strong bearish candlestick pattern has support from volume. Expect a trend change to either down or sideways here for Silver.
Published @ 05:15 p.m. EST on January 11, 2020.
—
Careful risk management protects your trading account(s).
Follow my two Golden Rules:
1. Always trade with stops.
2. Risk only 1-5% of equity on any one trade.
—
New updates to this analysis are in bold.
0 Comments