With that as an introduction, let's take a look at a few charts. First off, we have a chart of the COMEX continuous silver futures contract. As you can see, it isn't a pretty picture. Price gapped down below the median line of the Andrews' Pitchfork back in September and drifted downward until this month. Price then made a run back at the median line, but failed to reach it.
That isn't and wasn't a good sign and the price ended up falling today through the lower parallel line before bouncing a little higher. Due to the steepness of the pitchfork I have drawn the price trigger line at 50% of the distance between the first high used to drawn the pitchfork and the previous pivot low. Had I not done that the trigger line would have fallen so far below the pitchfork that it would have been useless as any kind of sell signal.
Should price fall and stay below the price trigger line, there isn't much supporting it. How far it might fall is difficult to say. On the chart I have drawn the Fibonacci Retracement levels. Those levels are based on the high price between $21.00 - $22.00 which is the basis for the upper parallel line of the pitchfork. The Fib Retracement is drawn from that level down to the recent low of $15.635. This is a technique used often by Pitchfork Playground, but don't blame them if my interpretation turns out to be less than perfect.
Unless the silver price finds support around the level it is at now, things don't link promising. Peter L. Brandt thinks silver could go to $13.16. His coverage of silver has been pretty accurate. He called for a $16.15 silver price target on June 20, 2013. Brandt has been right thus far, so I don't know that I would bet against him at this point.
The flip side of the silver price picture is to look at price in terms of cycles. The chart below, while perhaps a little difficult to follow shows the Hurst Cycles for the SLV. The cycles pictured are the 39.4 week in light green, the 21.8 week in darker green, and the 76 day which is bluish (turquoise). In the Sentient Trader program you can drill down deeper into the shorter cycles, but there really is no need for our purposes here.
Based on current cycles, the SLV price is projected to reach around $19.00 sometime between December 22, 2014 and January 29, 2015. The thing is, as the price changes, the projections change. Also, cycles are affected by the underlying market trend. In essence, if silver ends up being in a very strong downtrend, the cyclic pattern gets "swamped". It's still there, but a strong trend will hide the pattern, making it look like it disappeared and carrying price in the direction of the underlying trend.
Software programs have done wonders for technical analysis. In the end, however, it still take the human brain to analyze the patterns and consider other factors that affect the price. Which way the silver price goes will largely depend on which way price breaks in the first chart we looked at of the Andrews' Pitchfork. Should price fall decisively through the price trigger line, then there is pretty much nothing on a technical basis to keep it from sliding further. However, should the price bounce, then it could set up for a trip back up toward the median line around the $17.00 level. Should price move above $17.00, then the next target would be $17.885 and $18.58. Beyond those levels, I'm a little more dubious whether silver would rise above $19.00.
A third realistic possibility is that the silver price remains within the pitchfork, between the bottom parallel line and the median line. This would lead to a continuing grind lower in price as we have seen for quite some time.
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