Elliott Wave Update on Silver: Many Triangles in Play
Short Term Forecast - The last newsletter included a chart for Silver and the count for Silver has played out as forecasted. We have even more detail and further insights on what we can expect to occur next.
We have been neutral on Silver and the Silver stocks that we cover since the last newsletter when we projected the price of silver to drop below $7.00. Now that Silver has broken below $7.00, many are wondering what to expect now. Triangles are corrective patterns, but can sometimes extend further than expected and can also re-define the angle of the triangle with a wave that travels further than expected. This occurred with one stock that we are following, but it did not change our status on this stock because we were aware of the triangle. We even labeled the top trendline of the triangle for this stock as suspect for a higher price for wave d. It was not a recommended buy at that juncture.
We have identified many triangles, including Silver, HUI and gold and numerous silver stocks, that all appear very similar and are moving together.
The Silver chart below indicates that wave e of the contracting triangle is still in play. This wave can complete as a zigzag(abc) or a smaller contracting triangle(abcde) itself. After examining many Silver contracts and Silver stocks, we will likely see the final wave e complete as a contracting triangle. This would indicate that we should see continued choppy sideways action as the price action moves tighter into the apex of the triangle. The sideways action in a triangle is the indecision in the markets and we should expect an explosive breakout when the decision is made. We still believe we should see the breakout to the upside, but with the analysis of this triangle pattern, we can wait and let the market tell us. The price action at the apex of the triangle and subsequent breakout should be close to the lowest price for the wave e low, so we can wait for a clear signal as the triangle progresses.
Our analysis on the USD and Gold also supports this count. We should see further upside for the USD and support at the lower triangle trendline and especially the wave c low is crucial for the breakout to the upside of the triangle. We are watching Gold as well and it should also maintain price action above the lower trendline as the USD completes its current rally.
Notice that the Feb 24th chart had a false spike for the wave d high. This spike made little difference to the outcome of the forecast and the subsequent ABC pattern to follow, but what it did do, is make us aware that the following wave e, had to complete as 3 waves(abc) or 5 waves (abcde) and there would be further sideways action to complete the triangle. The Feb 24th wave d high was not complete and it utilized the ABC to complete its wave, instead of the beginning of the wave e zigzag. These points are very small, but this is the depth of analysis that is involved in providing the most accurate forecast possible. This updated chart should make the forecasted price action easier to follow, with the wave e zigzag and triangle options.
Our HUI chart is also a compelling Elliott Wave chart that indicates a triangle is completing and the price action should resolve to the upside as well.
These charts are only a guide so that you can follow the action and watch for the potential breakout. The action could play out exactly as illustrated or it may need adjustments as we follow it through. The action could also negate the triangle count all together, but it allows us to focus on a likely outcome as illustrated above. Triangles can break to the upside or to the downside, so these charts should also assist to keep us on the right side of the play.
The identification of the triangles and subsequent analysis has kept us on the right side of the market. If you are interested in viewing these updated charts and other detailed charts with targets on a daily basis, please see the registration details below.
To learn more on the status of Gold, Silver, HUI and the USD, please visit the link below for registration details. The commentary and forecasts are updated daily, including intraday commentary and chart updates. Fibonacci pivot dates and cycle analysis are also utilized to forecast reversal dates. The indices covered include the NASDAQ, DOW, S&P 500, Nikkei, and DOW Transports. Commodity charts include the CRB Index, Copper, Crude, Sugar, Wheat, Corn, Soyabeans, Platinum, Palladium, Gold, Silver, HUI and the XAU (Gold and Silver index). Additional Elliott Wave charts cover the US Dollar (USD),(CAD), 10 Year Treasury Note Yield (TNX), Nortel, Ballard Power, North American Palladium, Placer Dome, Gold Corp, Barrick Gold, High River Gold, Pan American Silver, Couer D Alene Mines (CDE), Bema Gold (BGO.TO), Durban Roodeport Deep (DROOY), Newmont Mining (NEM) and Agnico Eagle Mines (AEM).