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.

Silver: Could be good to buy some.

Higher lows on the MACD seen as price formed lower lows on the daily chart. Positive divergence spotted.

On the longer term weekly chart, price is currently at support provided by the 200w MA.

Could be good a good time to buy some silver.