Silver huge bull setup
Updated
broke down from the trend that most would draw and assume a retracement or even bear however, even with a lower break out of the fib channel it will still be within a setup for a megaphone bull break out. Elliott wave analysis of the megaphone happened to be aligned with a 50% retracement of the December run at the end of wave 4 though this wave passes through the 38.2% at the bottom of the fibs channel meaning it might get stopped out short of the full 50% retrace. The end of Wave 5 indicates a decisive moment for longer bull or bear move however, the bull megaphone pattern combined with the longer timescale wave 5 of the channel/pennant also ending within margin of error at the breakout point does lean towards a further break of the much longer timescale pennant putting targets way up to $2500.
Note
So something happened last night which makes trading for that longer term $2500 a bit more murky. Gold broke up from a pennant that I was neutral on and with metals being correlated its a high possibility that silver will follow with a short term break up. This means silver would hit the pennant resistance early out of sync with the pennant waves and without any momentum to break through. A break down of the shorter scale pennant now an unlikely event, would setup for the rest of the megaphone pattern to play out and the lower it goes within the megaphone the higher the target past the pennant resistance providing much needed momentum to break through. There is plenty of time for needed short term break down, 38.2% fib level is most likely misinterpreted as a big bull support of which a break down should clear the other channel supports effortlessly. matching the first fractal wave down within the megaphone wave 4.
I set a pending above the 50% fib channel level for the likely break up on top of my pending positions at the bottom target which will be removed if it does break up. short term break up target is the larger timescale pennant.
Note
Ha OK so Gold wasn't a proper break then and the drops on both begins or ends here just into my green box on Silver but Gold still has a bear target from the pennant of 50% retracement, the same target as silver. the further into the box Silver drops the more probable $2500 is unless it keeps going down from here past the red line and red box. Then it would be sketchy but still possible with a retracement below 100%.Note
as of writing silver got all the way to the top of the support. A break is a possibility, a week early break than the wave indicates could mean a retracement to the support or near the support before taking off properly. be careful with adding a lack of patience adding positions before the weekly wave terminates. short traders should aim to collect profits on the first wave up. signs of a return back to support would be a prolonged stall 2 possibly 3 days of little movement. One of my trading buddies from other trading communities with the alias GDuB suggested a hypothesis that failure to touch support is a sign of diminishing bears and an indicator for breaking after noticing this in many patterns. It happened here in the megaphone and in the bigger pennant on silver right where a break is due. Good Luck All.
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