SLV - what's next?

7 Apr 2020

SLV traded down to $10.86 last month. It had not seen those levels in more than 11 years. After making a high of $48.65 in 2011, SLV ultimately traded down to $13.04 in December 2015 (orange support line). A rally attempt in the first half of 2016 to take out the downtrend line from 2014 (orange resistance line) failed and the $13.04 low was successively tested twice in late 2018 before SLV tried to again attack the downtrend line from 2014. Ultimately this orange triangle failed with the coronavirus events and the $13.04 low gave way. Volume spiked at the low and is much higher than the sell off that preceded the 2008-2009 sell off. MACD and RSI made lows not seen in many many years. As a result of this sell off the gold/silver ratio spiked to all time highs by a long shot. It still remains extremely elevated at 111 as gold has made it back to its highs pre coronavirus. I expect that SLV will make up this underperformance in the near term. MACD and RSI favorable. We are at about a 50% retracement from the recent low to its high immediately preceding the sell off. This should correct sooner rather than later.