Into the Feb 2019 highs, traders had turned very bullish on the metals, understandably so, as the metals had been rallying for a number of months from their respective 2018 lows. Upside targets were being increased from the precious metals Gurus, and traders/investors were buying the short term bullish hype.
However whilst many traders had arrived late to the party, Elliott Wavers should have been cautious about expecting any further upside. Into the Feb 2019 high, we could count 9 swings, that suggested a completed impulse wave, coupled that with the extremely bullish sentiment, gave us a recipe to be cautious about expecting further upside, we felt a pullback was due. A move lower to kick off the late to the party bulls was needed and turn sentiment more bearish.
Fast forward I think there is a strong case to be made that a low is in at $13.65, or can be with a minor new low. Whilst it’s below $14.05 it may still see a minor new low under $13.65 to end wave [c] and complete an ending diagonal (bullish declining wedge).
If a low is actually in place for the preferred idea, then a strong move above $14.05 – 14.10 is needed to further argue for a rally higher. For those that study price action, you may have noticed the momentum over the last few weeks is also slowing up, that’s a good sign to support the current idea of an ending diagonal for wave [c] and complete a larger ABC decline.
Generally speaking, we tend to see strong momentum for wave A, but wave C shows much weaker momentum, that’s a strong characteristic of a Zigzag correction, aka 3 wave corrective move.
Until next time,
Have a profitable week ahead.
The iShares Silver Trust (SLV) was trading at $13.87 per share on Tuesday morning, up $0.03 (+0.22%). Year-to-date, SLV has declined -13.26%, versus a 6.77% rise in the benchmark S&P 500 index during the same period.
This article is brought to you courtesy of The Market Oracle.