Silver Reinforces L-T Bullish Count, Defines New Risk Levels | RJO Futures

September 6, 2016 3:57AM CDT

The market's failure to sustain losses below 21-Jul's 19,27 initial counter-trend low and Fri and overnight's impulsive rebound above 08-Aug's 19.515 low renders the entire Jul-Aug sell-off attempt a 3-wave affair as labeled in the daily log scale chart below.  Left unaltered by a relapse below at least Fri's 18.825 smaller-degree corrective low and especially 25-Aug's 18.44 low, this 3-wave setback is considered a corrective/consolidative structure consistent with our long-term bullish count updated in Fri's Technical Blog that now calls for a resumption of this year's major uptrend that preceded this Jul-Aug setback.

Silver Daily

The smaller- and larger-degree corrective lows cited above at 18.825 and 18.44 are considered our new short- and longer-term parameters from which the risk of a resumed bullish policy and exposure can be objectively rebased and managed.

Silver 240

Silver Weekly

The weekly (above) and monthly (below) log scale charts show the magnitude of this year's major uptrend and (we believe) REVERSAL of the secular bear trend from Apr'11's 49.82 all-time high to Dec'15's 13.62 low.  The combination of:

  • a confirmed bullish divergence in MONTHLY momentum
  • an arguably complete 5-wave Elliott sequence and
  • historically bearish sentiment in Dec'15

is a powerful one that supports such a major bullish count.  Recently frothy levels in our RJO Bullish Sentiment Index left the market vulnerable to Jul/Aug's correction.  But as a result of the past few days' important rebound we believe this indicator will not pose a problem to our long-term bullish count until this market proves weakness below 18.44.

These issues considered, traders are advised to return to a bullish policy and first approach setback attempts to the 19.50-area OB as corrective buying opportunities with a failure below at least 18.825 and preferably 18.44 required to threaten or negate this call and warrant defensive steps.  In lieu of such weakness further and possibly accelerated gains are expected with the upper-20-handle that capped this market in Jul/Aug acknowledged as a still-formidable resistant cap it needs to break to expose the next leg of this year's major bull.

Silver Monthly


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