Silver 1 OZ 999 NY (XAG=X) Prices Hover in Bullish Reversal Zone
Our last silver price update was April 29, when we stated “little progress has been made since April 15 and the waves do not appear motive. Therefore, we will not be surprised if silver makes a deeper cut and one more jab towards lower prices.”
Lower prices were cut indeed. Remember, back on March 25, silver prices were trading near 15.53 and we discussed the potential for another wave lower into the 14.40-14.80 price zone which may lead to a strong bullish reversal. Now that silver prices have arrived, we have the minimum waves in place to count the three-month long correction as over.
You see, the corrective wave to unfold since February 2019 high is a bearish zigzag pattern. Wave ‘c’ of this zigzag pattern is an ending diagonal. There are a lot of wave relationships showing up near 14.40 (which was the bottom edge of our reversal zone identified March 25).
- 78.6% retracement of the November 2018 to February 2019 uptrend is at 14.39
- In the zigzag, wave ‘c’ is equal to the length of wave ‘a’ at 14.40
- The trend line connecting wave (i) and (iii) in the diagonal pattern crosses near 14.40 (green line)
As a result, there is a lot of evidence in a relatively small zone suggesting a bullish reversal and pivot.
When anticipating a reversal in trend, waiting for the new trend to strengthen and push above resistance (in this case) will help shift the likelihood a low has been established. In this case, the green parallel line hovering near 14.75 is the level that if broken, suggests a meaningful low has been established.
Therefore, the current Elliott wave for silver prices is that wave 2 or (B) is nearing a termination point (if it hasn’t ended yet). Once this ending diagonal pattern finalizes, we are anticipating a multi-month bullish wave to carry to 16.70 and possibly 18.15.
Overall, the bias in prices is: Downwards.
Note: this chart shows extraordinary price action to the downside.
By the way, prices are vulnerable to a correction towards 15.01.
The projected upper bound is: 14.78.
The projected lower bound is: 14.07.
The projected closing price is: 14.43.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 4 white candles and 5 black candles for a net of 1 black candles. During the past 50 bars, there have been 27 white candles and 21 black candles for a net of 6 white candles.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 18.7472. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 36 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 33.54. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 1 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -135.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 12 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 3 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAG= closed down -0.020 at 14.445. Volume was 8,900% above average (trending) and Bollinger Bands were 7% narrower than normal.
Open High Low Close Volume___
14.410 14.472 14.330 14.445 14,132
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 14.65 15.01 14.91
Volatility: 12 15 19
Volume: 1,413 283 71
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
PREC.M.XAG= is currently 3.1% below its 200-period moving average and is in an downward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect very strong flows of volume out of XAG= (bearish). Our trend forecasting oscillators are currently bearish on XAG= and have had this outlook for the last 57 periods.