Friday, December 16, 2011

SLV Trendline Break

Click on Chart to Enlarge

The SLV etf is shown above. It gapped from above its 2008-2011 bull market trendline to below the trendline with a large gap down on Wednesday. I noted a similar thing in gold on Monday. When trendlines are broken with large gaps, that is typically significant. Everything still indicates this is headed much lower. From my study of how these things go, I would expect the market to correct at least down to the beginning of the final "blow off" leg up of the bull market. That would be around 17.50 at the mid 2010 consolidation level.

With options expiration today and metals set to gap up up today, I don't expect downside today. We may see a move back up toward the trendline on SLV today for a backtest of the trendline. But I would expect continuation downward next week.

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