Silver Bears To Take A Rest?
New York (Jun 28) It’s been more than a month since the price of silver topped at $17.75 on May 18th. The bears have been in the driving seat ever since, which led the precious metal to $15.52 as of June 26th. This steady decline by $2.23 in just six trading weeks might convince you now is a good time to sell some silver. In our opinion, you should think twice. The next chart explain why.
As you can see, the whole sell-off from $17.75 to $15.52 could easily be counted as a five-wave impulse. Furthermore, the sub-waves of waves (3) and (5) are also clearly visible. The perfect Fibonacci relationships between the length of the waves this impulse consists of, deserve to be noticed as well. According to the Elliott Wave Principle, every impulse is followed by a three-wave correction in the opposite direction. If we apply this knowledge to the 4-hour chart of silver, we would come to the conclusion we should expect a significant recovery, which has the potential to take prices back to $16.50. That is why we believe it is going to take a while, before we see the price of silver below $15.52 again.