Clive Maund opines that having hit a target, silver has formed what is believed to be an intermediate top over the past five weeks or so, which it should soon start to descend. On its three-month chart, Maund sees this presumed topping pattern started with the appearance of a prominent Gravestone Doji or Shooting Star candlestick early in July, with its negative implications being amplified by its having occurred on very high volume. While moving averages are in bullish alignment, the now yawning gap between the 50-day and 200-day makes a correction likely. After dipping back during August, the price rallied toward the highs early this month, and then failed, dropping hard on Friday, making it very likely that a Double Top is completing.
On the 8-month chart, we can clearly see why silver is likely to form an intermediate top has risen up to become very overbought at the top of the expanding channel shown. A reasonable objective for a correction is the support level shown at and below $18 and the lower boundary of the channel not far beneath it, and it could drop farther. With the dollar turning higher and latest silver COTs at frightening extremes, it is not hard to see why it might drop soon. Normally such COT readings would lead to severe losses. See Charts for basis ...
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