Silver’s action in recent times has quite closely paralleled that of gold and so much of what has been written in the Gold Market update can be taken to apply to silver, except, obviously, prices and support levels. Silver staged a reversal day last Monday after becoming very overbought, similar to that in gold, and then went on to react sharply, although by Wednesday - Thursday it was already stabilizing above support at the April 04 highs in the $8.40 area, which it had earlier succeeded in breaking above by a significant margin.
The Reversal Day last Monday is believed to signal an end to the intermediate uptrend that began in September, and if so, a lengthy period of consolidation/reaction is to be expected, mirroring the situation in gold. Although a short-term rally is to be expected next week following last week’s plunge, it is considered unlikely that it will get very far, after which renewed decline it to be expected. It should be noted that if silver drops back into pattern, by breaking back below the April 04 high at about $8.40, and perhaps heads for support in the $8 area, it will not negate the overall bullish pattern.