Originally publish my bullish Silver chart some 16 months ago. Which might appear to be way off in time but still within price range and overall scheme of things still acceptable turning zone though little too early. This bearish cycle now appears to be complete.
Silver, might have just formed a significant low and is probably in early stage of new bullish cycle that could result in 2001 high being retested or new higher high being formed in due course.
Here are the summary of Technicals based on monthly chart (see below):
1. Retraced 78.6% of the move from 1999 low - 2011 high. 2. The Dec 2015 low has concluded in ending diagonal (falling wedge) with falling volume on monthly chart. 3. This is reflected in the momentum indicator such as RSI coiling at the low and MACD turning up from being flat at the bottom. 4. In proximity of rising 200 MA on monthly. 5. Low being formed around Dec/Jan, a period when many major lows have been formed in the past from which strong rally developed. 6. Gold/Silver Ratio chart is in the topping zone and might be ready to reverse. 7. XAU - PHLX Gold/Silver miners Index also appear to have broken out of the steep falling channel.
If above holds true then we could see a large zigzag move towards 2001 high by 2019 based on time symmetry.
Warning: This is my interpretation of price action using TA approach that I consider helps me the most but could be completely wrong. Therefore as always, please do your own analysis for your trade and risk management. You should follow this on Paper Trading Account till you feel confident to apply the skill to a live account.
UPDATE - 11th July 2016: Updated potential wave counts of the Dec 2015 low
DanV
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UPDATE - 7th May 2016: Dollar Index (DXY) appear to have formed an intermediate bottom from which we could anticipate a retracement bounce (probably in progress already. If correct then this should result in some sort of retracement in most USD denominated assets like Gold, Silver and Oil.
Corresponding Silver daily chart, looking for retracement towards $16 or so at least.
DanV
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This will line up better with DXY the Dollar Index also correcting after possible falling wedge which could be "Leading Diagonal".
ryopphdi
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Hi Dan,
What's your current view on Silver? It seems we were too cautious and it is doing another impulsive move to the upside. What do you think?
DanV
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Thank you for your question. From my last chart above, I interpreted that the decline we had was minor 5 waves, therefore a retracement bounce and another leg lower should have followed.
As the price did not formed that lower leg, I have been reviewing it and the whole cycle of the low is still initial 5 in magenta and the congestion I have now labelled as flat abc in blue for minor wave iv in magenta. Therefore the impulsive move up is wave v and it should complete soon as larger wave 1. Please see the chart
Once this is completed we should see a zizga retracement for wave 2 around 15.0 - 15.5 to enable us to enter long for the larger wave 3.
This is likely to play out as USD has bee weak and is close to complete its cycle. The anticipated bounce in DXY could take back towards 98. Here is the chart
This week on Thursday there is ECB Rate and Press Conference scheduled with Unemployment data on Friday. These could be catalysts for USD to bounce. So we must wait for the right opportunity to enter long. Though I understand it is not easy when you see the price appear to be running away from you. However, I will review it at the weekend to see what prices action in the interim show.
DanV
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Update 4th April 2016:
Since the of 23rd March, we appear to have minor 5 wave decline which could be wave a of the zigzag. If correct we are now looking for a small retrace and another leg lower to complete this correction of the move of the low. If our overall analysis is correct then the next wave to the upside would be relatively quite strong in the form of Wave 3. See Silver char and SLV chart
This correction could complete around 14.5 to 14.0 for Silver (SLV =14.0 - 13.8) which is approx 61.8% retracement of the move from Dec low to March high with time relationship could be around early to Mid May. . That would be nice time and price window to start looking for taking position. We could consider 2017 - SLV 17 call option for around 0.4 -0.5.
DanV
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Update - 23rd March 2016:
As mentioned in Gold update "It seems we have initial 5 wave move up completed and retracement in the form of a zigzag is in progress. This could continue till 3rd week in April when FOMC Minutes are scheduled or next FOMC Meeting for the rate decision towards the end of April based on possible Fib time relationship". Here is the chart of SLV (Silver ETF)
For taking long term Call Options on Silver, SLV ETF is the main contender meeting our requirement of liquidity and availability of sensible Options. In addition Some of the junior miners are:
AG - First Majestic Silver Corp
HL - Hilca Mining
SLW - Silver Wheaton Corp
PASS - Pan American Silver
Rest of them are relatively too small with inherent risk of financial stability and limited Options availability. But price is also low for some of these and if desired and the risk is acceptable they can be bought direct.
Dafinci
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which strike and expiry at what price on SLV?
ryopphdi
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I second this question.
Dafinci
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Entered SLV Jan20'17 $17 Call at $0.60 into bullish support. Will reload on next drop $13.80-$13.90 which is also a fib level.
Silver seems to be tracking 1/USD, so will keep eye on that.