Silver – Weekly Analysis
I have been thinking about some silver signals since the weekly close on Friday. Today the metal provided a bit more clarity. Will it be enough to dot the “i” and cross the “t”?
In this silver analysis, we read the candlesticks, Elliott Wave context, momentum, and key support/resistance to map the highest-probability path. We also compare silver with futures and the SLV ETF — there are subtle differences, and they could be important.
CANDLES:
The biggest puzzle silver has recorded is the different tops for the metal and its futures. For the structures to align, the metal needs to make a new higher high; the futures do not. The simplest way to resolve this would be an impulse up in both (as shown on the first two candle charts). Today, both instruments preserved the structure for a potential impulse by not overlapping waves 1 and 4. Also today, silver formed a Bullish Engulfing, but futures did not. Does this mean that only the metal will be moving strongly higher while futures lag behind? Simple, eh?
Short term: bullish
Mid term: bearish
Long term: bullish, with a high risk of flipping bearish in November
More food for thought. This is the main difference between silver and gold. If you recall the weekly on gold, we discussed that gold clearly invalidated an impulse up and is now potentially forming a large impulse down.
Elliott Waves
While the latest long term assessment on October 18 remains intact, we will mostly focus on the short term prospective.
Last Wave – Futures – Micro
By making a new ATH silver futures invalidated the potential larger correction we have been tracking for about a month. Now, after a new top, the wave down again looks impulsive. At the micro level I am tracking three potential counts, but I would not be able to say which one holds the highest probability until the disconnect between XAU and SI is not resolved. Hopefully, it happens in the next 1-2 weeks.
SLV
SLV made a larger bounce than I expected at the end of October, potentially completing wave B or 2. However, it still has a chance to form an impulse in green as long as it does not break below $44.52 before making a new ATH.
SUMMARY
Silver is neutral overall. The short term is bullish, but the mid-term bearish signals remain neither confirmed nor invalidated. A clear directional signal is needed, and it likely will not emerge until the wave structures align across all silver-tracking instruments.
At this point, silver has lost its alignment with gold. While gold does not need a new ATH and has already changed the character of its waves, silver still has a realistic chance of making a new ATH. I am not sure I have seen this type of divergence before. For now, patience is required until the picture resolves.
The long-term outlook remains bullish, but it is fragile after a monthly close that carries potentially strong reversal signals. There is a fair chance of an extended bear market in silver, although several working hypotheses still need confirmation. We should also remember how extremely overbought silver was on multiple frames — see the study from October 11. Something has to give.
=====
