A small range inside week for Silver leaves the Elliott wave counts unchanged.

Summary: Both Elliott wave counts expect a downwards breakout from the triangle pattern.

The first wave count allows for new lows below 11.703. The final target is at 7.41.

The second wave count expects new highs substantially above 49.752 in coming years. For the short to mid term, a deep pullback may continue, which may end about 18.605. This wave count would be invalidated with a new low below 11.703.

ELLIOTT WAVE COUNTS

FIRST ELLIOTT WAVE COUNT

MONTHLY CHART

Click chart to enlarge.

This first wave count has a better look in terms of Elliott wave structures. It may have a slightly higher probability. This is in line with the first wave count for Gold (overall).

It is possible that the zigzag for Grand Super Cycle wave II may be incomplete. Super Cycle wave (b) may have completed as an expanded flat correction.

Cycle wave b within the expanded flat of Super Cycle wave (b) is a 1.25 length of cycle wave a. This is within the most common range for B waves within flats of up to 1.38 times their counterpart A wave.

Cycle wave b within Super Cycle wave (b) subdivides as a double zigzag. This is a very common Elliott wave corrective structure, particularly in a B wave position. This part of the wave count has an excellent fit; all subdivisions are correct and the structures are common. This resolves the problem that the second wave count has of the triangle trend lines not being strictly adhered to.

A target is calculated for Super Cycle wave (c).

WEEKLY CHART

Click chart to enlarge.

Super Cycle wave (c) must subdivide as a five wave structure, most likely an impulse. Cycle wave I within Super Cycle wave (c) may have just begun.

Cycle wave II may not move beyond the start of cycle wave I above 29.772.

DAILY CHART

Click chart to enlarge.

Cycle wave I must subdivide as a five wave structure, most likely an impulse.

Sideways movement of the last six weeks is choppy and overlapping. It looks now like intermediate wave (2) may be complete as a double zigzag. If it continues higher, then intermediate wave (2) may not move beyond the start of intermediate wave (1) above 29.772.

If intermediate wave (3) has begun, then minor wave 1 within it may be complete. Minor wave 2 may be an incomplete double flat.  

SECOND ELLIOTT WAVE COUNT

MONTHLY CHART

Click chart to enlarge.

The bear market for Silver may be complete.

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, Super Cycle wave (b) subdivides as a complete regular contracting triangle, and Super Cycle wave (c) subdivides as a complete five wave impulse that is relatively brief and shallow.

Elliott wave triangles normally adhere strictly to their trend lines. The triangle for Super Cycle wave (b) does not; the lower b-d trend line is overshot, which reduces the probability of this wave count and is one reason for publication of the first wave count.

When charts are drawn on a semi-log scale, price has now breached the upper edge of the trend channel. Copy this channel over to weekly and daily charts. The upper edge of this channel may now provide support.

Grand Super Cycle wave III must subdivide as a five wave impulse at Super Cycle degree.

WEEKLY CHART

Click chart to enlarge.

Grand Super Cycle wave II may be a complete zigzag. A new bull market may have begun for Silver.

The channel about Grand Super Cycle wave II is copied over from the monthly chart and extended outwards.

Super Cycle wave (I) may subdivide as an impulse or a leading diagonal. An impulse is much more common, so that is what shall be expected unless overlapping suggests a diagonal should be considered.

Cycle wave II may not move beyond the start of cycle wave I below 11.703.

DAILY CHART

Click chart to enlarge.

Cycle wave I may be a complete five wave impulse. Cycle wave II may now begin as a multi-week to multi-month pullback. Cycle wave II would most likely subdivide as a zigzag. The most likely point for cycle wave II to end may be the 0.618 Fibonacci ratio of cycle wave I. If this target is wrong, then it may not be low enough. The first major correction within a new trend is often very deep.

Primary wave A may have begun. Intermediate waves (1) and (2) within primary wave A may be complete. Minor wave 1 within intermediate wave (3) may be complete. Minor wave 2 may be an incomplete double flat.

If it continues higher, then intermediate wave (2) within cycle wave II may not move beyond the start of intermediate wave (1) above 29.772.

TECHNICAL ANALYSIS

WEEKLY CHART

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

The previous upwards trend reached very extreme and RSI reached deeply overbought. Now a bearish candlestick reversal pattern completes, which has support from volume. This bearish signal should be given weight in these circumstances. Either a 180° reversal or a time consuming consolidation may be expected here.

So far six weeks of sideways movement has still not been enough to bring conditions down from extreme. A small triangle may be forming. If price breaks out upwards,  then upwards movement may be limited by extreme conditions. 

DAILY CHART

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

Sideways movement has now been long enough to bring RSI well into neutral territory and ADX down from extreme. There is again room for an upwards trend to develop. However, with conditions remaining extreme at the weekly chart level any further upwards movement may be limited.

At the daily chart level, the potential triangle does not look like a strong pattern. Each of the triangle trend lines have only the minimum required 2 anchor points; the trend lines have not been further tested. Now price has closed below the lower trend line by a very small margin without support from volume; this possible downwards breakout is unconvincing. The triangle trend lines may need to be adjusted again.

Published @ 05:39 p.m. ET on September 19, 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.