There was a head and shoulders patter in silver (and I believe gold) in the past month or so. The height of the pattern was about $ 2.75. The base of the pattern was at the $ 28.50 level, therefore once this level was broken the head and shoulders pattern possibly comes into play. The head and shoulders pattern is one of the most reliable technical indicators (60-80 % of the time correct). Therefore the head and shoulders correction indicates about $ 28.5 - 2.75 = $ 25.75.
Also the first fibonaci level on the way down was about $ 28. Once this got broken and somewhat confirmed the head and shoulders correction I thought there would be good odds for more down-side. The second fibonaci level on the way down is about $ 26 dollars. I think this will be the approximate region where it will bounce from.
Gold also has been chanelling nicely in an upward trend for the past 2-3 years. Look up the chart. This upward trend has not been broken. $ 1300 area is next resistance, thereafter $ 1600 looks reachable according to the trend. I see silver tracking gold harder either way, i.e when gold turns up silver will go at least twice as hard up.
