SILVER: Elliott Wave and Technical Analysis | Charts – April 29, 2021
A new high slightly above 26.601 has invalidated the main daily Elliott wave count and left an alternate valid.
Summary: The first wave count is bearish for the mid and long term. A target is at 7.45. For the short term, upwards movement may continue to 27.523 or above, but is not expected to make a new high above 26.601.
The second wave count is overall bullish at the monthly chart level.
The second wave count is bearish for the mid term, expecting a pullback to about 18.605 before the bull market resumes.
ELLIOTT WAVE COUNTS
FIRST ELLIOTT WAVE COUNT
This first wave count still has a better look in terms of Elliott wave structures.
It is possible that the zigzag for Grand Super Cycle wave II may be incomplete. Super Cycle wave (b) may be complete 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.
If it continues further, then Super Cycle wave (b) may not move beyond the start of Super Cycle wave (a) above 49.752.
It is possible that Super Cycle wave (b) was complete at the last high and cycle wave c within it is a complete five wave impulse.
The disproportion between primary waves 2 and 4 within cycle wave c gives this part of the wave count the wrong look, but it should still be considered because Silver does not always exhibit good proportion.
If Super Cycle wave (c) has begun, then it should move below the end of Super Cycle wave (a) at 13.569 to avoid a truncation. A target is calculated.
Super Cycle wave (c) downwards may be underway.
Neither primary wave 2 nor cycle wave II within Super Cycle wave (c) may move beyond their start above 29.820.
It is possible that intermediate wave (1) was over at the last low as a leading contracting diagonal. The current bounce may be intermediate wave (2).
Following a diagonal in a first wave position, the second wave is commonly very deep. Intermediate wave (2) may be expected to end about the 0.618 Fibonacci ratio at 27.523 or above. Intermediate wave (2) may not move beyond the start of intermediate wave (1) above 29.820.
SECOND ELLIOTT WAVE COUNT
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.
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 continue as a multi-month pullback. Cycle wave II may be subdividing as a regular flat. A likely point for cycle wave II to end may still be the 0.618 Fibonacci ratio of cycle wave I at 18.605. If this target is wrong, then it may not be low enough. The first major correction within a new trend is often very deep.
Cycle wave II may not move beyond the start of cycle wave I below 11.703.
Primary wave B is a 1.01 length of primary wave A. This is within the common range for B waves within flats of 1 to 1.38.
Primary wave C may now move lower for this wave count to at least make a slight new low below the end of primary wave A at 21.749 to avoid a truncation and a very rare running flat.
Within primary wave C: Intermediate wave (1) may be a complete leading contracting diagonal, and intermediate wave (2) may now continue higher. Following leading diagonals in first wave positions, second waves are commonly very deep. If the target of the 0.618 Fibonacci ratio at 27.523 is wrong, then it may not be high enough. Intermediate wave (2) may not move beyond the start of intermediate wave (1) above 26.601.
Click chart to enlarge. Chart courtesy of StockCharts.com.
There is no longer a trend at this time frame.
Price is consolidating with resistance at 28 and support at 22.5. A breakout is required for confidence in a trend.
For the very short term, another completed week was upwards and it had a little support from volume although range was smaller. This may be bullish for the very short term.
Click chart to enlarge. Chart courtesy of StockCharts.com.
Price is still consolidating with support about 24 and resistance about 27.95.
Following the high on February 1, 2020, there was a series of three lower swing highs and three lower swing lows, but over the last week the last swing high has been exceeded very slightly, which breaks this pattern.
There is still no evidence that the current upwards movement is over. It may be expected to continue until a bearish candlestick pattern is seen.
Published @ 04:48 p.m. ET.
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