Silver: Three Black Crows.

The price of silver is sinking fast and is currently at US$37.78 /oz. As price went parabolic and almost hit a high of US$50.00/oz, the tension which is akin to a rubber band being stretched to its limits was released a few sessions ago giving rise to a frenzied pace of correction. These rapid declines have a way of feeding themselves as speculators unwind their long positions to limit their exposure or losses. Could we see price moving lower?

Being where it is now, silver has broken the support provided by the 50dMA at US$38.80 /oz. Well, some may argue that it is quite possible for price to overshoot supports in certain instances before closing above the support in the same or the next session. This is a valid point.

However, looking at the three bearish candlesticks formed in sequence, it brings to mind a pattern known as the "three black crows". This is extremely bearish and more downside is probable. The RSI has further extended its decline but is still some distance from being oversold. The 100dMA is at US$34.06/oz.  Could this be tested next?

The 100dMA could well provide the next support. If this were to give way, it would be some way to fall to the next stronger support which I see provided by the 50wMA which is at US$26.92/oz currently. That would be an almost 50% decline from its recent high if it were to happen.

The correction is an opportunity to gain or increase exposure to the precious metals at supports which is what I like to do. Buying at resistance or chasing as price goes higher is not my cup of tea. However, investing in silver requires some strength of mind. This is surely some roller coaster ride.