Executive Summary

• Silver is going through a small degree decline to set up the next wave 3 advance
• Longer-term trend is up
• Silver prices should remain above $26.471 under this model and possibly reach $35

Silver In Brief Correction

Silver prices declined almost 3% today unwinding this week’s gains. When we zoom out to silver’s daily price chart, there is a bullish Elliott wave pattern building.

In the silver Q3 report written on June 28, we forecasted:

“…the larger trend remains to the upside though silver may need to use the first portion of Q3 to continue its correction lower. Anticipate a bullish turn between $25.56-$28.00 that eventually leads to new price highs with initial targets near $41-42.”

Silver did take its time in finalising its correction. Silver bottomed on August 8, at about the halfway point of Q3 at a price of $26.471. Since August 8, silver has rallied over 10%.

The rally since August 8 does appear to be a small degree impulse wave. This is good news to help silver shine. After a brief correction that started today, silver will likely resume its climb in a small degree wave 3.

The current correction should hold above the August 8 low. We’ll likely see a wave 3 bullish reversal in the $27.80-$28.70 price zone in the next week or so.

How Far Will Wave 3 Travel?

If we are following the correct Elliott wave count, then the model implies a swift silver rally to $35-$40. 

The 1.618 extension of wave (i) is near $35 while the 2.618 extension is near $40. These are common wave relationships if wave (iii) is an extended wave.

That would be an initial target zone with higher prices still possible as this is simply a third wave making the entire impulsive advance incomplete. Wave’s 4 and 5 would still need to unfold that could send silver on a larger climb

Current Silver Elliott Wave Count

The current Elliott wave count for silver appears to be wave ((ii)) of 3. According to Eliott’s rules, wave ((ii)) must hold above $26.471 for this wave count to remain valid.

The next wave, a rally in wave ((iii)) of 3 could be really strong and swift carrying up to $35-40 and possibly higher levels.

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