The prospect for the birth of a new Bull-Run
in Silver speaks to a broader cyclical theme that relates to a dying dollar
bull, and a corollary cyclical sentiment shift back toward a strong market preference
for tangible vs. paper assets. From its current cyclical low in December of
2015, Silver Bullion has risen 30%.
In the broadest of terms, the above
referenced theme would suggest the early adoption of a general pair’s trade
that was short the dollar and long commodities.
At present, from an Elliott Wave
perspective, the 30% rally in Silver is somewhat tentative in terms of whether
or not its wave structure is exhibiting impulsive (bullish) or corrective
(bearish) patterns.
From its cyclical low at $13.63, the 1st wave move up
to $15.99 appears impulsive. The
sideways expanded flat/running correction to the noted wave-2 low at $14.78 was
clearly corrective in nature, which led to a rather impressive run to the
current print high just under $18.00.
The latest move up is clearly impulsive however; price needs to
run higher in amplitude toward the $18.60 level or better yet, toward the
rising blue upper trend channel boundary in order to satisfy the appearance of
a sufficient 3rd wave advance.
As an aside, amid the course of the sideways correction toward
wave-2 down, two upside targets were identified and captured at $16.98 and
$17.73 respectively.
Additional observations of importance surround key resistance
noted at $18.50, which is a rather important level that must be pierced in
order to negate the three outstanding downside targets listed at $13.30,
$13.00, and $11.80.
Key support rests at $15.99, which is the crest of the first wave
up. A breach of this level upon an
anticipated 4th wave decline would violate the makings of a
longer-term bullish impulse. Should such
a breach occur, it is far less bullish but still possible that another
sub-dividing 1st and 2nd waves may correctively develop.
Although the daily price action is overbought and due for a
pullback, a new momentum high has confirmed Friday’s close, and suggests higher
highs in the offing prior to the next pullback.
The general guidelines and parameters outlined above should over
the near-term, greatly assist all those interested in following the future success
or failure of Silver Bullions attempt at giving birth to a new bull market.
Until another item of interest tweaks our interest:
Trade Better / Invest Smarter
