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
In the first image, we have marked a potential wave 1 or A at the December 30, ’09 low (16.77), followed by wave 2 or B at the January 11, ’10 high (18.89) and a possible wave 3 or C at the February 5, ’10 low (14.66). This marking gives us the basis for both the alternatives that we present in this report:
In the first case (second image), taking a potential wave 1 at the December 30, ’09 low, wave 2 at the January 11, ’10 high and wave 3 at the February 5, ’10 low, we can only expect a first wave expanding diagonal forming, as the ongoing potential wave 4 has already significantly entered within the limits of wave 1. If this scenario is to hold valid, we should see a reversal in the price while keeping below the January 11, ’10 high, marked as wave 2. The more likely reversal points in price seem to be around the 18.00 level.
Alternatively, taking a potential wave 1 at the December 30, ’09 low, wave 2 at the January 11, ’10 high and wave 3 at the February 5, ’10 low, we would expect a possible resumption of the uptrend, which would also force a revision to our medium term marking as well as the medium term outlook of the metal. For this scenario to hold valid, we would expect to see silver breaking above the December 3, ’09 highs (19.46) without breaking below the February 5, ’10 low (14.66).