Silver: Extreme bearishness.

The positive divergence I observed in the chart has been negated. This is very bearish.

Daily chart.

Weekly chart.

With such strong negative sentiments, we could see silver testing support at US$20.00 an ounce next.

Although I believe in the fundamentals of the precious metal, waiting for the dust to settle (i.e. waiting for a clear bottoming process) is the prudent thing to do as the downtrend is still very much in force.

Related post:
Silver: Could be good to buy some.

Cheaper silver is good for me.

"... gold dropped an astonishing $84 per ounce to close at $1,478, down over 5% on the day and below $1,500 per ounce for the first time since July 5, 2011.   Silver had an even worse day with a price decline of 6.5%, closing down $1.81 per ounce at $25.95." 
Source: Panic selling in gold and silver.

How low would prices go? What would I do?

For now, hold my horses and wait for the dust to settle.

If we believe in the long term story behind silver, we should look out for a chance to buy more. If the panic selling should continue, we could buy more on the cheap and cheaper still.

Being able to buy more of something I believe in at lower prices does not cause me distress. Why should it?

Related post:
Silver: Some views.