Silver is set to hit at least one lower low. The questions are when and how deep. The metal closed August rather bearish from the candles perspective. Let’s test the hypothesis from different angles.
Silver has been under bearish pressure since a very strong Bearish Engulfing in September 2020. For a year, the metal was not able to close above that candle despite two tries.
In June, it made another strong bearish statement by forming a Dark Cloud Cover that was fully confirmed in July. The confirmation candle also closed below the 8 EMA line.
The August candle could be much worse if it closed 24 pips lower. But it is very bearish even by the closure at $24. A Three Black Crows, confirming a Dark Cloud Cover and closing below 8 EMA.
The expectation is simple – a multi-month bear market. Of course, miracles happen, but I would first like to see them materialize in the form of bullish weekly and monthly candles.
The indicators are strongly negative and support the decline. A monthly 100/200 MA death cross was formed in May. The only previous such cross happened in 1989 and it was followed by 4! years of decline and a loss of ~30% of metal value.
This is the only occurrence and it would not be prudent to expect the same outcome based on a single statistics, however, we should take a note.
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