Sunday, May 1, 2016

SILVER: Prospects for the Birth of a New Bull Run

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:

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