Like Gold, Silver May Be Headed Down As WellA couple of days ago, I spoke on a potential downward reversal in gold but have we just formed a double-top in silver also? From all appearances, we have done just that...which means that silver prices are likely headed down. We’ve reached the top of a 5-year trend channel, a reverse trend channel at that. In early July, prices also touched the top of a short-term reversal trend channel. On a side note: For those who are unaware, reverse trend channels work really well for measuring a market who's movement has become really steep. In my experience, reversal trend channels are highly accurate at anticipating reversals.
Another indication of a bearish change in behavior is that the last down-wave had really large volume while the responding up-wave contained only half the volume of the down-wave, suggesting that supply is entering the market and demand is tiring. Friday's trading session also had a wide price range, indicating ease of movement, AND we managed to close near the low.
Result: Bearish
First level of Support: If $19 is taken out, I'd look for major support in the $18 area.
Target: If this is a complete turn-around, prices can go in the $14 area.
