Trade Update: SLV

Of the big three gold, silver, and oil, silver seems to be the most overbought in the short term. One look at the daily chart of SLV shows you why. The divergence between the share price and the 200 day moving average is extreme to say the least and the previously pegged stochastic has rolled over and is heading down. Now take a look at the huge buying volume over the last month, that is panic buying and is not sustainable. But none of that really scares me as much as this. The two day chart shows an up close followed by a down day. Notice the ranges of the two days are in the same bounds and the volume is high, from buying to selling. That is new buyers coming in are about to get bit as the old holders are getting out. All this is signaling a change in direction, what I'm waiting for now is Crammer to come out to tell us to buy.

How far down will it go? The bad news is that it won't go far. If SLV falls to 150 sell your parents and children into slavery and load the boat, but 170 is probably the best we can hope for. You might not even want to short it, just pick up some more farther down.