Silver Prices: A Trend Is Emerging

Following up on May 13's "Silver Is Very Close to a Breakdown".

July futures $19.29 down 4.3 cents.

From The Short Side of Long:
Decision Time For Silver
Chart 1: Silver finds itself between a downtrend and a strong support…

Precious metals sector outperformed majority of other asset classes in Q1 of 2014, however that strength has recently dissipated. Whats even more interesting is the fact that while Gold and various miners rebounded powerfully in quarter one, Silver has continued to disappoint. As we can see in Chart 1, the metal now finds itself at a technical pressure point.

To break on the upside, Silver will have to overcome a downtrend line, which has been in place since the bear market began in May 2011. On the other hand, if Silver was to move towards new bear market lows, it will first have to break a strong support area around $18.50 to $19.00 per ounce. A break in either direction could occur very soon, and would be a leading indicator for the rest of the PM space.

So which way will Silver move?

While I wish I could answer that question with precision, unfortunately I do not know as my crystal ball is currently getting fixed. What I will do is place forward a handful of clues, so that we can work on probabilities and case scenarios.

Chart 2: Silver has declined 15% over last 3 months, but not yet oversold...MUCH MORE

HT: Abnormal Returns

I've used the "A Trend is Emerging" line a few time. From 2012's "Climateer Line of the Day: A Trend is Emerging Edition (UNG)":

..."A trend is emerging."

I'm sorry, private joke. One of the best securities analysts I know said that in 1999 when looking at this chart, minus the last eight years of course, and right before the stock took a sixty percent dumper. At the time, MO was up approximately "1 billion, gagillion, fafillion, shabolubalu million illion yillion..." percent over the prior twenty five years.

Splits: Jun 3, 1974 [2:1], Jun 1, 1979 [2:1], Apr 11, 1986 [2:1], Oct 11, 1989 [4:1], Apr 11, 1997 [3:1]

(that's Dr. Evil's demand [...Yen] in the third movie, about which Wikipedia says "This time his demand is met with simple confusion from the world leaders.")

As I said in a 2010 usage of the phrase:

*The stock is Phillip  Morris (now Altria). The move depicted is 8 cents to $25.06.

$31.42 last. 

Update May 20, 2014, $40.21 and yielding 4.70%.