Until early this week, as Dollar traded down to find its bottom, Silver had risen sharply into the resistance zone at $16 to $18 range. Investors became very excited about the prospects for Gold breakout a symmetrical triangle to new highs. The process became very overbought on Silver's daily RSI indicator shown in the chart. Traders seem to forget the pain when Silver declined 61% last year. I am not sure that Dollar has already bottomed out, but Silver's top seems already in.
I started to build short position this week as MACD cross down signal got confirmed. You can clearly notice a 15% to 20% decline after MACD cross down in early this year from 9-month daily chart. More important, as Silver price marched three higher highs from $14.45 to $15.78, and to 17.26, MACD just could not make a higher high at all. This is my favorite "Triple negative MACD divergences". Another negative technical indicator is that Silver's price is way ahead of its 50-day moving average.
From Elliott Wave perspective, Silver's wave pattern seems to be completed at 17.26 high with a three (W) (X) (Y) corrective waves: wave (W) ended at 15.78 with a clear ABC in it; (X) = 12.27 and (Y) finished at 17.26. It is not a text book perfect wave shape. But combining with above mentioned other technical indicators. I pulled the trigger!
BTW, just found out that there are only 4,880 results when I search "Triple negative MACD divergences" on Google. So I decided to trademark it. Here we go! :)
Triple negative MACD divergences ®© by Elliott Waver
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