Conventional wisdom would say there is going to be follow-through to the downside in silver and the mining stocks.

I speculated that the 10 week moving average in silver could act as support, and sure enough, SLV looks like it is going to close the week right at that moving average today.

Loads of people are now calling for further downside, and it’s completely understandable why they would say that.

However, while silver has fallen out of bed on the daily chart, gold is still holding strong and hasn’t even dropped below the 20 day MA yet.

I am going to go way out on a limb and posit that this week’s drop in silver is a fakeout, and should create the energy for a move to $30 in the next 2 months.  The first couple of days next week could see us move a little lower, but if I am right, we should see a huge reversal into the close on Friday.

Also, remember that the regional banks, including PACW are still under extreme pressure.  Another large downleg could see gold explode higher.

This week’s move lower 100% shook off loads of PM longs, and it would be quite the irony to see the metals launch higher now.