Silver Is Looking To Crash

Silver is not looking so good. After having an amazing few years from 2009 to 2011, silver has lost about 60% of its value from its high set in April 2011 (which “happened” to be the previous nominal high set in the early 80s). Unfortunately for the Silver bulls, the future is not looking much brighter. In fact, I expect Silver to crash relative soon.

So this is what I’m seeing on the chart.

After a massive bubblicious run-up (mainly due to a wrong framework of thinking), Silver lost all of its momentum as the ‘bubble popped’. There was a point when it looked like Silver might turn around, but as you see on the chart, the breakout failed. And a new downtrend was established. The most recent multi-year low “happened” to bounce off a previous area of resistance. Yes, 20-21.50 was the previous high before the breakout in 2010, however, you can see the ~19 area acted as a wall before it finally lifted. I consider this a much more important area to watch.

If Silver can close below $19 on a monthly basis, then that is likely a trigger for it to head lower, where I don’t see legitimate support until $14.70 and $12. This chart remains bearish until Silver can close above the downtrend line, which at the moment is around $23. Even then, I wouldn’t feel comfortable going long Silver just because there is so much supply overhead.

$SI_F Monthly Chart

(Click to embiggen!)

Silver Monthly

 

 

Tags: $SLV $SI_F $ZSL $USLV $AGQ $SIVR

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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