SILVER: Elliott Wave and Technical Analysis | Charts – May 22, 2020
Summary: It is possible that Silver may remain in a larger bear market while price remans below 18.920. The final target remains at 5.806.
A new high above 18.920 would leave only a bullish Elliott wave count remaining. That wave count expects new highs substantially above 49.752 in coming years.
ELLIOTT WAVE COUNTS
MAIN WAVE COUNT
MONTHLY CHART
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The bear market for Silver may be nearing completion. Within a bearish movement, in the middle there should be a large interruption to the trend in the form of a B wave; bearish movements should have a three wave look to them. This wave count expects that normal look.
This Elliott wave structure for this bear market is labelled as a single zigzag for Grand Super Cycle wave II. Single zigzags are the most common Elliott wave corrective structure.
Within the zigzag, Super Cycle wave (a) subdivides as a five wave impulse, and Super Cycle wave (b) subdivides as a complete double combination. Super Cycle wave (c) must subdivide as a five wave motive structure, either an impulse or an ending diagonal. Strong upwards movement suggests a diagonal should now be considered. Two daily charts below consider both of these structures.
A target is calculated for Super Cycle wave (c) to complete the zigzag for Grand Super Cycle wave II. Calculations using the more common ratios of equality and 0.618 yield negative results, so the next Fibonacci ratio in the sequence of 0.382 is used.
Draw a channel about the entire bear market of Grand Super Cycle wave II as shown. A bearish Elliott wave count must still be considered most likely while price remans within the channel. If price breaks above the upper edge of the channel, then the bullish Elliott wave count below would increase in probability.
WEEKLY CHART
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Super Cycle wave (c) must subdivide as a five wave motive structure, most likely an impulse.
Cycle waves I through to IV may be complete. Cycle wave IV may not move into cycle wave I price territory above 17.786.
DAILY CHART – IMPULSE
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Cycle wave IV may be continuing higher as a double zigzag. There would still be alternation within this wave count between a time consuming triple combination for cycle wave II and a quicker double zigzag of cycle wave IV. Fourth waves are often more brief than their counterpart second waves for commodities.
Cycle wave IV has remained below cycle wave I price territory. All Elliott wave rules for an impulse are met.
Cycle wave V must subdivide as a five wave motive structure.
DAILY CHART – ENDING DIAGONAL
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It is also possible that Super Cycle wave (c) may be completing as an ending diagonal.
All sub-waves within an ending diagonal must subdivide as zigzags. Cycle wave IV must overlap cycle wave I price territory. Cycle wave IV may not move beyond the end of cycle wave II above 18.920.
The diagonal would be expanding: Cycle wave III is longer than cycle wave I, and cycle wave IV is longer than cycle wave II. Cycle wave V must be longer than cycle wave III; it must be longer than 7.217.
BULLISH WEEKLY CHART
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This Elliott wave count considers the possibility that Grand Super Cycle wave II may be complete.
If Grand Super Cycle wave II is complete, then within it the most difficult part of the wave count is the structure of Super Cycle wave (b). This wave count considers it may have been a regular contracting triangle.
Elliott wave triangles normally adhere very well to their trend lines, which may be tested within the triangle’s sub-waves. This wave count sees a large breach of the lower b-d triangle trend line from April 2019 to July 2019. This triangle does not have the right look, although it meets all Elliott wave rules. The probability of this wave count must be judged to be low.
A new high above 18.920 by any amount at any time frame would confirm this wave count and invalidate any bearish wave count.
TECHNICAL ANALYSIS
WEEKLY CHART
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The bearish long upper wick with price very near strong resistance suggests a pullback here.
DAILY CHART
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The last target at 17.84 has been met and exceeded. Now a bearish candlestick pattern suggests a pullback to support here. Support is about 17.25 and below that about 16.65.
Published @ 08:55 p.m. EST on May 24, 2020.
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