In today’s regular Gold Trading Alert, I wrote about silver’s potential head-and-shoulders pattern, and that it would be created once silver declined some more.

It already happened.

The silver price is sliding today and its quickly approaching the December low.

This is a major breakdown, and since the downside target based on this H&S pattern is close to the October, we can expect a sharp downswing here.

Now, here’s the important part:

It would be perfectly normal for silver to first move up a bit, perhaps to the rising neck line, which would then serve as resistance, and decline only thereafter. The verifications of breakdowns are normal, but they are particularly common in case of breakdowns below the head-and-shoulders patterns.

So, if we see some immediate-term “strength” here, please be aware that this is very likely just a normal part of a very bearish pattern, and nothing to be concerned with.

Also, did you see that quick plunge in junior miners?

I told you that this was the likely outcome, when very few wanted to believe that and… That’s what juniors did.

At the moment of writing these words, the GDXJ is below $36, and it’s after the breakdown below it’s very short-term (marked with orange) support line. During today’s session, juniors moved below this line, then they moved quickly back to it, and then they declined once again. The decline can now continue.

I previously wrote that our winning streak of 11 closed profitable (unleveraged) trades is likely to get longer, and today’s slide in the GDXJ definitely confirms it.

Congratulations on staying strong and patient when juniors were moving higher, and it “felt” like they were breaking to new highs. It was a trap, and you didn’t fall for it.

Again, congratulations!

As always, we’ll keep you - our subscribers - informed.

PS. Great things are also happening in Oil Trading Alerts and Stock Trading Alerts (Paul just took profits from his previous long positions in the S&P 500) and if you’d like to upgrade your subscription to the Diamond Package that also includes both of them, please contact our support to make sure that all your paid-for days will get properly transferred and that you’ll get the extra 10% discount.

Thank you.

Sincerely,
Przemyslaw K. Radomski, CFA
Founder, Editor-in-chief