On Friday last, and even yesterday it felt like the PM bull market was on solid footing. We were geniuses.
Oh sure, the oscillators on weekly charts for silver miners had already peaked out and were on the decline. And yes, there were disturbing negative divergences between the the oscillators and price.
But it’s a bull market, right? So a healthy correction is expected.

Today that breakout gap on SLV below a double top hump is somewhat disturbing. Note that on a gap up SLV formed the first leg of the base of the double top pattern. The gap down from the pattern leaves behind an “abandoned Baby” … a double top abandoned baby, isolated at the peak by a pair of gaps . Right now, to me, it feels rather bearish for silver, and the PMs in general.

Today in his news letter Rambus discussed a bearish pattern forming on WTIC. This got me rummaging through some my own, almost forgotten, charts for WTIC. Here is one of my very long term charts for WTIC. There are markings on the last pattern in the series that are borrowed from a Rambus chart.

If (or when) the last pattern in the series breakouts to the downside, stocks will experience another deflationary crash. Precious metals and the miners will not escape the downdraft. I am not saying it is going to happen, but I am saying that it could. There are two sides to a coin – danger and opportunity. We need to be aware of and alert to both.

All credits to Rambus 1, and I hope he will forgive me for stealing his thunder.