Trading the Elliot Wave - Silver 28/8/2012

Introduction

This is my first attempt to read the current trend in Silver, using mostly Elliot waves, Fibonacci retracements and RSI/MACD divergence. Feel free to state your opinion on my interpretation, and be aware that I am a complete newbie concerning this subject.

 

Disclaimer

This is just an interpetation that tries to predict the future and it might be completely wrong. I can not be held liable for any losses you make when following this advice.

 

Silver Daily

To me this looks like a bearish pattern which is about to turn bullish due to both MACD and RSI divergence; I assume we are currently in the 2nd wave of the bullish pattern. The two shortest dotted lines mark wave 1 and 3 of an impulsive wave; the longest line marks the complete wave… 

 

Silver Hourly

This trend also looks like it is about to convert; maybe this is the end of the first wave ? Although there is some resistance at the 30.66 level from the daily, I am expecting it to even fall lower to 30.0ish (38.2ext)… In case it does break through 31.27, this means the first wave is not in yet (even though I expect it to be, since it looks more like a corrective then an impulsive pattern… The short dotted line points to a possible impulsive wave, but I expect the long one to be a longer-term wave 1.

 

Silver 5 mins

The marked wave looks like a bearish impulsive pattern to me, and the MACD seems to have convergence… so I presume the bullish trend is not yet complete…. The RSI might be a bit cumbersome, so I am not quite sure what to make of this….

Conclusion

While I can not guarantee anything, I would expect the silver to drop to the 30 or 29.6 level and bounce back into a wave 3; this would be a sign to go long. However, if it falls below 29.20 level, I would have to re-evaluate my possibilities.

In case it is a long, the third wave should go at least to the 35.25 level…


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