Long term outlook: Up
Medium Term Outlook: Down
Short Term Outlook: Sideways to up
Medium Term Revision Point: Break above 21.31
Potential Medium Term Target: 8.45 and lower
As expected we saw the start of a possible upward move in Silver, starting on December 23. December 22 low is a possible first wave down of a medium term downward move. The upward move in the last few days of the previous week seems to be the start of a correction of this first wave down.
The main chart presents our preferred view for the upcoming days in Silver. As per this chart we expect to see at least a three wave move upwards in Silver, followed by the resumption of the sell off that we witnessed after December 3, 2009. Our target for the intermediate upward move will be around 18.20 to 18.50, with a chance of hitting the 18.95 level as well, but while keeping below the December 3, 2009 highs. These levels are likely to present a sufficiently strong resistance in the upward move to ward off any further rallies for the time being. Subsequently, we expect to see a bigger sell off than we saw in the first wave of the downward move from December 3, 2009 to December 22, 2009.
However, as an alternative (bullish) count given in the second image, the December 3, 2009 high may have been only the end of wave 3:C of the longer term correction in Silver. This would imply that the December 22 low is a possible 4th wave low for the market and, therefore, we should be expecting a final fifth wave rally in the market, preferably making a new high.
In either case, the coming week should present good short term buying opportunities in the market with a minimum target at around the 18.20 to 18.50 levels. We would, therefore, be looking to exploit any high probability, low risk buy signals that emerge during the upcoming week. It should, nevertheless, be kept in mind that this would only be a short term long position, as our comparatively longer term outlook for the market remains downwards.