Just eight days ago, on April 5th, Silver was trading around 15.10 after having bottomed at 14.78 a couple of trading days before. That was also the day, when we published “Silver Has Been Great. Now What?” to share with our readers that the Elliott Wave Principle was flashing bullish signs. The following chart was all we needed to form a positive outlook on the price of silver.
As visible, the 4-hour chart of the precious metal allowed us to recognize a 5-3 wave cycle. According to the theory, the trend was supposed to resume in the direction of the five wave impulse. That is why we thought “the bulls should take the wheel and try to take the price of silver back to the 16.00 area.” The next chart shows how the situation developed.
After a short hesitation, the bulls did return and managed to take silver prices to a new multi-month high of 16.20 so far. This was a typical situation, demonstrating how the Wave principle can give us a hint of the market’s future intentions, in order for us to be able to take advantage. In this case, it allowed us to catch a move of more than one dollar an ounce in just 7 trading days. What to expect from now on? To answer this question, let’s take a look at the 30-minute chart to see how the wave structure of the recent rally looks like.
It appears the advance from 14.78 is an unfinished impulsive sequence. If this is the correct count, wave 4 might cause the price to decline a little more, before the bulls return in wave 5. But once an impulse is over, a correction in the opposite direction follows. So, in our opinion, it is too late to buy silver right now. Instead of going long above 16.00, traders could be better off waiting on the sidelines , because a noteworthy pull-back might occur soon.
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