Best Financial Markets Analysis Article Who would have thought that Gold would be down $26, and Silver would be up $0.34? Let's take a look at the pattern that has developed in spot silver. Spot silver prices, for the most part, crashed from the mid-March high at $21.40 to the mid-October low at $9.06 (-58%). Let's notice that the October low also coincided with a glaring positive momentum (RSI) divergence, which usually indicates that the power underlying the dominant trend is dissipating -- ahead of a directional reversal.

Although it is too early to declare the downtrend complete, both the pattern off of the March high into the October low and the RSI divergence -- not to mention at 58% loss of value -- strongly suggest that silver prices should be in the early stages of a potent recovery rally. My initial target zone is 11.00-11.50, and for ETF traders the ETF is the iShares Silver (AMEX: SLV).

By Mike Paulenoff

Mike Paulenoff is author of the MPTrader.com (www.mptrader.com) , a real-time diary of Mike Paulenoff's trading ideas and technical chart analysis of Exchange Traded Funds (ETFs) that track equity indices, metals, energy commodities, currencies, Treasuries, and other markets. It is for traders with a 3-30 day time horizon, who use the service for guidance on both specific trades as well as general market direction

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