Today I will share a pure candle view.
Since printing a strong Inside Out candle in September, silver has spent 2.5 months consolidating at the bottom of that September’s candle. While there is a chance (as it looks now) of printing a Bullish Engulfing on December 31, I am somewhat skeptical because of a rather large upper wick of December’s candle so far and the somewhat concerning weekly development. Still 3 weeks to go and anything could change.
The most interesting section. Silver completed a solid Falling Three Methods in 7 weeks in August-September and is still under enormous bearish pressure from that combo. As you can see, the stock is trading within that huge red candle. It closed only once above the mid point and was immediately rejected after. The stock is traveling below 8 EMA.
I added some waves that would make sense from the candle formation perspective. The stock is expected to hit a lower low (below 21.81), but it has not happened yet. The way that Silver hits that lower low would be very important. If it hits and closes below 21.81 – it would be end of wave (A), the decline would continue. If it hits and closes the candle above 21.81 – it would be end of wave C, meaning that the bulls are back and the correction is likely over.
For a confirmation of the reversal and the established bullish trend, silver needs to close above 27.13 as of today’s view.
On Wednesday silver made a Bearish Engulfing and has been consolidating since. Note how stock has moved below 50 MA since September and is now below 100 MA. Not an encouraging sign if you ask me.
Summary: I view that silver would continue the whipsaw moves for multiple weeks and possibly months. Once it decides to hit a lower low, the type of candle on that week would be crucially important for determining the future path.