Trading the Elliott Wave - Silver 05/09/2012
This is a follow-up for an attempt to read the current trend in Silver, using mostly Elliott 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. The first post can be found here...
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.
After reading up on the Elliott wave, I have to re-evaluate my previous post a bit; the whole movement from 2012/02 to 2012/08 is definately a bearish impulsive wave, ending in an ending diagonal in the fifth wave. This would imply that the following wave would probably be an ABC-wave. If the current level stays below the current top, then I would still assume a fallback to 30 before going to higher levels. The odd thing is, the pattern does not look like a corrective pattern to me, so this might not be an corrective wave, but an impulsive wave, which would also mean silver could drop to the 30-level and then explode exponentionally... I still have to read up a bit on Elliott waves since this looks like a problem.
If the top is not in yet but grows even higher to the 34.5 level, then I would expect a fallback to the level between 31.6 and 31.3.
Update on the daily after reading up a bit
after looking for possible wave forms, this might actually be a flat or an extended flat as well, as the trend seems pretty strong here... This would imply that one should expect prices of 28 or even lower (in case of an extended flat).
Hourly & 5 min chart
I decided not to look at these as I am currently waiting for the right moment (i.e. the 30 level) before I try to find an entry point....
If the current top stays I would suggest to look around for a strong reversal up at the 30's mark somewhere... It should al go up from there...
If there is no strong reversal around the 30's mark, then is should probably drop to 28 or even lower in a typical flat (or expanded flat), and one should wait for the first reversal above the 32 level again...
It might be probable I miss the bottom, but for now (due to the MACD and RSI divergence) I stay with my initial target and reading of the first wave.