SLV Silver ETF With Falling Tops – Downtrend Chart Analysis With Bearish Price Targets

by Olivier on October 23, 2014

Many are still hoping for a trend reversal in silver. Rest assured, it will come one day. Technically speaking though it is most likely not going to happen anytime soon.

The reason is simple. We continue to witness falling tops. The most important characteristic of a downtrend, the most recent red bar I drew into the chart, indicating such a lower high, would have to be taken out in order to spring a bear trap. As a disciplined trader you do not bet on something that might happen or that you hope might happen. You patiently wait until it happens. You identify the trend, follow it and you simply trade price.

In the case of silver that means you either short silver or stand aside. Followers of my public list, regular readers and those who listened to my interviews avoided the carnage. I have been saying the same thing for over a year now. It is too early to commit to the long side. The technicals never said to buy and still don’t.

I published a post where I posited that the Worst Is Yet To Come For SLV. Silver hasn’t tanked since but the technical picture still hasn’t improved. Hence the path of least resistance still remains down. Going long before price confirms the series of lower lows has stopped is just wishful thinking.

Furthermore it is very unlikely we will get a sustainable bottom with Silver after such a long downtrend without capitulation type of volume. Volume is anemic at best. No signs of capitulation. Odds are high bad things will happen first before good things can happen.

Click on SLV chart to enlarge:

Always up-to-date SLV Silver ETF chart on my public list.

Looking at the following weekly chart for SLV, the 15$ and 12.5$ area are the most likely price targets once the recent lows are undercut. The areas highlighted in the chart will start to act as magnets attracting price.

Click on SLV weekly chart to enlarge:

Always up-to-date SLV Silver ETF weekly chart on my public list.

Hat tip to Charles Kirk for tonight’s quote.

Should you find yourself in a leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks. – Warren Buffett


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