Silver Completing Textbook Rounded Reversal And Monthly View

A reader asked me to comment on the chart of Silver, and it’s quite an impressive chart to behold.  Silver is close to doubling in price from the October 2008 lows to present.  Let’s take a look at the daily chart and also view the monthly structure as well.

Silver Daily:

Silver is showing us exactly what a textbook “Rounded Reversal” pattern should look like, from the slow shift from sellers to buyers which comes complete with a multi-swing positive momentum divergence.  Use this as a reference as to what the pattern should resemble.

Silver prices have increased roughly 70% from the October inflection point, and one can take advantage of price moves in silver potentially through the SLV (SLV) Exchange Traded Fund (which shows an identical pattern).

The momentum oscillator is close to reaching a new high, but the price rise from mid-January has been almost consistently up every day in a comfortable, steady fashion.

From a more conservative standpoint, the trend was confirmed officially to “up” in mid-January when price took out the early January price high just after the 20 EMA crossed bullishly above the 50 EMA.  Price is now above all three key daily moving averages, having cleared the 200 this week.

Let’s see how this structure might fit in the larger, monthly chart picture.

Silver Monthly Structure:

I’ve placed a very simple Elliott Wave count, which shows that we have likely completed the ABC Corrective Phase (after a remarkable run-up from $5 to $20 which sent the price quadrupling in roughly 5 years).  Most likely, we are in early Impulse Wave 1, which means that - long term - silver could have even more upside potential yet to come.

Officially price is above all three key moving averages, and these respective averages are - despite the hideous 2008 plunge - still in the most bullish orientation possible.

Price is probably due for some sort of short-term correction to work off the recent strength, but by the same token, don’t doubt such a strong uptrend.  Keep watching silver (and gold) for additional clues.

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