On silver’s 14-year chart we can see that, despite the severe correction since the Spring 2011 peak, it has still not broken down from the large broadening uptrend shown, nor has it dropped below the nearby zone of strong support shown. In the last update, posted on 6th October, we looked for the next major uptrend to begin almost immediately, having observed a large potential Head-and-Shoulders bottom completing. That pattern aborted and we were stopped out (of both gold and silver) for a minor loss. Although that interpretation was invalidated, it still looks like silver is in a basing process, and it may be forming a Double Bottom with its June lows.

On the 14-year chart silver’s retracement from the Spring 2011 peak looks like a normal healthy correction and it appears to be about to reverse to the upside in exactly the place you would expect it to, from the zone of strong support arising from extensive trading from early 2008 through mid-2010 in the $17.50 – $20 price range, and from the support line of its major uptrend channel, which is coming into play not far beneath. In recent months it looks like it has been marking out an intermediate base pattern at the support level. Volume indicators are positive, which is a positive sign, with the Accum-Distrib line holding up very well on the decline.

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