First, a little review: As you know, we predicted in our March 31, 2014 that silver would be one of the best investment opportunities of the decade @ between $13 and $14/oz. and we predicted price might decline to that level at some point during the second half of 2014. You can see from this chart we put up in our It's Too Early to Get Excited About Silver:"article, "
What is so important about this level? Well: $17.26/oz. silver is a 78.6% retracement of the decline from the October 26, 2008 low (@ $8.41/oz.) to the April 24, 2011 rally peak @ $49.78/oz.
Now this is the thing about turning points: Every investment is based on a disagreement about the future between the buyer and the seller. Here, considering silver, the current price at this moment is $17.80/oz.. The silver "bears" (the sellers) believe the price will go lower, and the silver "bulls" (the buyers) believe the price is going up from here. And in the current market conditions, the fact that price broke the 2013 low just last Friday strongly suggests that the price will continue lower, in keeping with the trend since the April 24, 2011 peak. On the other hand, the fact that price has declined to an important mathematical extreme (after a hurricane of bullish price action between October 26, 2008-April 24, 2011) argues, just as strongly, for a bounce from $17.26/oz.