Summary
[list=]Long term outlook: Up
Medium Term Outlook: Down
Short Term Outlook: Sideways to Down
Medium Term Revision Point: Break above 21.31
Potential Medium Term Target: 8.45 and lower[/list]
The main image is of the weekly chart of Silver to present our current broader perspective of the market. With a completed wave (1) or (a) at the March 3, 2008 high (21.31), we seem to be in a long correction of this wave (1) or (a) since then. With a possible 5 wave decline to the October 31, ’08 low (8.45), completing wave A of (2) or (b); followed by a three wave rally to the December 4, ’09 high (19.46) completing wave B of (2) or (b), we are now expecting another five wave sell off to complete wave C and, thereby, the ABC of wave (2) or (b). The likely target for this wave C is somewhere below the 8.45 low of October 31, ’08.
The second image highlights the recent moves in Silver as seen in the Daily chart. We have marked the December 2, ’09 high (19.42) as the completion of wave B, from where we are expecting a five wave move down for wave C of (2) or (b), as shown in the broader perspective given in the weekly chart. With good support at the 15.90 area, we expect a pull back to start in the coming days to complete sub-wave iv, which would likely be followed by another sell off close to the 15.10 level.
In the coming days, the end of wave iv should provide an opportunity to take a short trade lasting several days, in the ride down for the completion of wave v.