A trend change was confirmed first with a channel breach and then with a new high above 16.554.
Summary: A third wave up may be underway. Within this structure, a first wave may be either complete or very close to completing. A second wave correction should offer an opportunity to join the trend. The mid term target is at 24.22. Risk and the invalidation point is at 15.818.
New updates to this analysis are in bold.
MONTHLY WAVE COUNT
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If super cycle wave (a) is a double zigzag, then within the second zigzag of the double labelled cycle wave y the structure may be complete.
There is a small overshoot of the (1)-(3) trend line at the end. This indicates the contracting diagonal structure is very likely to be complete.
If this wave count is correct, then super cycle wave (a) has subdivided as a three wave structure. That indicates Grand Super Cycle wave II may be a flat correction.
If this correction at Grand Super Cycle is a second wave (as opposed to a fourth wave), then a triangle may be eliminated.
A combination may also be eliminated because the first wave is a multiple. Combinations may only consist of a maximum of three corrective structures, so within each of W, Y and Z they may only subdivide into simple A-B-C structures (or A-B-C-D-E in the case of triangles). To label multiples within multiples increases the maximum beyond three, violating the rule.
Super Cycle wave (b) must retrace a minimum 90% of super cycle wave (a) at 46.19. Super cycle wave (b) may make a new price extreme beyond that seen for super cycle wave (a) above 49.752 as in an expanded flat.
Super cycle wave (b) may be any one of 23 possible corrective structures. It is impossible to predict at this early stage which one it will be, only to say it is unlikely to be a rare structure such as a running flat, expanding triangle or triple combination. That still leaves multiple structural possibilities. The most likely structure which would be able to meet the minimum price requirement at 23.945 is a zigzag.
The first movement up for a wave of this large degree must subdivide as a clear five at the daily chart level, and probably at the weekly chart level also.
WEEKLY WAVE COUNT
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Primary wave C is an ending contracting diagonal within the zigzag of cycle wave y. All subwaves subdivide as zigzags. The third wave is shorter than the first, the fifth wave is shorter than the third, and the fourth wave is shorter than the second. The trend lines converge.
This week the degree of labelling within the new upwards trend has been moved up one degree. At this stage, at the monthly chart level this looks right.
Two first and second wave corrections may be complete. Silver may be ready to move into a strong third wave up.
If this is correct, then within intermediate wave (3) no second wave correction may move beyond the start of its first wave below 15.818.
DAILY WAVE COUNT
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Intermediate wave (2) is now a complete zigzag. The channel about it is breached. Upwards movement is within minute wave i price territory, so this upwards movement may not be a fourth wave correction within minor wave C. Minor wave C must be over.
At 24.22 intermediate wave (3) would reach 1.618 the length of intermediate wave (1).
At this stage, the first five up labelled minor wave 1 may be either complete here or very soon. The structure on the hourly chart looks like it is ending with an extended fifth wave.
Upwards movement may be finding resistance at the upper edge of the base channel drawn about primary waves 1 and 2. This may initiate a reaction for minor wave 2. Minor wave 1 may have lasted six days, or it may continue for one or two more. Minor wave 2 may last from a few days to a couple of weeks. If it begins while price is still within the base channel, then it may be deep. A red daily candlestick would indicate minor wave 1 may be complete and minor wave 2 may have begun. At that stage, a Fibonacci retracement may be drawn along the length of minor wave 1. The 0.618 and 0.382 Fibonacci ratios would be targets for minor wave 2, with the 0.618 ratio favoured.
TECHNICAL ANALYSIS
DAILY CHART
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Upwards movement has breached the cyan trend line which provided resistance along the way down. Price has crossed above the 21 day moving average. ADX is increasing indicating a new upwards trend. ATR agrees as it too is now increasing.
It looks clear that Silver is now in a new upwards trend.
On Balance Volume has found support at the purple line. A break above the green line would be a reasonable bullish signal.
RSI shows no divergence yet with price to indicate weakness. RSI is not yet extreme. There is room for price to move higher.
Stochastics is about neutral leaving room for price to rise higher.
This analysis is published @ 02:09 a.m. EST on 9th June, 2016.
Lara,
Regarding the target for intermediate 3 – is the target (24.22) calculated at 2.618 x intermediate wave 1? Can you double check the calculations and advise?
Thanks.