Simple Moving Average(
) 50-period (red), 200-period (bold, gray)
RSI-14 with Simple Moving Average 5-period of RSI attached.
Elliott Wave Principles
Market and Price Action (patterns, candlesticks)
Last update on Silver: 12.28.2010 Forex Video
: Silver has shown resilience against the decline earlier in
December. The RSI was observed to remain above 40 throughout
this correction period.
- Now the market broke above a congestion formation, and the
RSI popped above 70 in the 4H chart. The projection for the
current rally is to the
area, which was a 30-year high.
- If the market has been ranging in 2010, or even just the Q4
of 2010, the
level should be respected.
- However, the market has been rallying, and has been very
strong since August, although it has gotten a bit choppy since
- What is going to happen if the market breaks above
: The daily chart shows 2 things developing.
there WAS a positive reversal that followed the initial bearish
divergence development. The market has been following through
with this signal, with the projection ending at
. This is the area the market will likely reach if it breaks
, there is an extended bearish divergence. This indicates the
markets refusing any significant corrections. This also
indicates that the bullish attempt is slowly losing steam. This
is not to say the market will reverse. This hot previous metal
might need a breather to start 2011.
- Both gold and silver are in this predicament, extended
bearish divergence matching with a diagonal triangle
- The diagonal triangle is either at the beginning of end of
a trend. Since we are far from the beginning, we may see 2011
usher in some correction to gold and silver.
- However, this is a premature anticipation, UNTIL we get a
signal such as a break below
. Very near-term traders who want to short have to beware of
support areas at
as well. Those with a bullish outlook do have to be aware of
the bearish divergence, UNLESS the RSI breaks back above 75 -
then a bullish continuation might be considered.
Will Silver Top early in 2011, or surge past 30.65 and
31.60? We would love to hear from you
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Fan Yang CMT
Chief Technical Strategist
Information and opinions contained in this report are for
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