Select Page

SILVER: Elliott Wave and Technical Analysis | Charts – November 6, 2020

by | Nov 9, 2020 | Silver

Upwards movement last week breached the short-term invalidation point for Silver, but price remains below the second invalidation point and within a channel.

Summary: The downwards trend may continue. A technical analysis target from a bearish flag pattern is about 18.68. An Elliott wave target from the first wave count is at 19.05.

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 mid term, a deep pullback may continue, which may end below 18.605. This wave count would be invalidated with a new low below 11.703.

ELLIOTT WAVE COUNTS

FIRST ELLIOTT WAVE COUNT

MONTHLY CHART

Silver monthly 2020
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

Silver weekly 2020
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 begun.

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

DAILY CHART

Silver daily 2020
Click chart to enlarge.

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

A new downwards trend may have begun with two overlapping first and second waves.

Last week upwards movement may have been the end of intermediate wave (2), subdividing as a double zigzag and finding resistance at the upper edge of the base channel. 

Intermediate wave (3) may now begin to increase downwards momentum.

No second wave correction within intermediate wave (3) may move beyond its start above 25.928. If this invalidation point is breached, then labelling of intermediate waves (1) and (2) as complete would be wrong, and then primary wave 2 may be continuing sideways.

Primary wave 2 may not move beyond the start of primary wave 1 above 29.772.

SECOND ELLIOTT WAVE COUNT

MONTHLY CHART

Silver monthly 2020
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

Silver weekly 2020
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

Silver daily 2020
Click chart to enlarge.

Cycle wave I may be a complete five wave impulse. Cycle wave II may now begin as a multi-month pullback. Cycle wave II would most likely subdivide as a zigzag. A 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. It may be subdividing as an impulse. Intermediate wave (3) within the impulse may now be unfolding lower.

There may now be two overlapping first and second waves complete within primary wave A for intermediate waves (1) and (2) and now minor waves 1 and 2. Minor wave 2 may have continued higher last week as a double zigzag. Minor wave 3 may have just begun.

No second wave correction within minor wave 3 may move beyond its start above 25.928. 

If primary wave A does complete as a five wave structure, then primary wave B may not move beyond its start above 29.772.

TECHNICAL ANALYSIS

WEEKLY CHART

Silver Chart Weekly 2020
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.

Last week price moved strongly higher with some support from volume. This suggests more upwards movement this week. However, On Balance Volume is at reasonably strong resistance, which may force price to reverse here.

DAILY CHART

Silver Chart Daily 2020
Click chart to enlarge. Chart courtesy of StockCharts.com.

Upwards movement has made a new short-term swing high. It has done so with a little support from volume, but range has declined.

What is not seen yet on this chart is the session for Monday 9th November has begun with strong downwards movement. Price is back below resistance about 25.7 to 25.5. This is bearish.

Published @ 10:06 a.m. ET on November 9, 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.

Comments