The overnight low in silver makes five waves down of at least minute degree. See the first chart below for the futures. Wave i was extended, and wave iii was not the shortest wave. All the rules are satisfied, except one. You'll notice that wave iv overlaps wave i slightly. This sometimes happens in futures markets, so I took at look at the cash markets via the SLV (silver ETF), and the overlap is not there ( see the second image ). The larger trend is undoubtedly down now, but the completed five waves likely trace out a higher degree ((i)), which means we'll now need wave ((ii)). The bullish sentiment will now come back. I also will need to move my stop since wave ((ii)) can and likely will retrace most of the move down thus far. Below I show a hypothetical retracement path to the 61.8% retracement target (green dashed line). I could sell a put here, rebuilding my vertical. Before I do anything, I'll wait for the first two waves to trace out on the hourly to see what form the correction begins to take (ie a 5-3-5 zigzag or a 3-3-5 flat for A-B-C).
Update: I didn't notice this earlier, but my proposed wave v of ((i)) has a converging momentum signal (ie a lower low in momentum matching a lower low in price). This rarely happens in a fifth wave. This is yet another reason not to jump the gun and sell puts here. The confirmation of the above count will be when wave iv is exceeded to the upside, or in other words price moving above 32.45 in the futures.
Crude
We potentially have five waves down on the hourly chart. If this turns out to be accurate, then the fifth wave on the daily time frame was truncated.
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