Clive P. Maund

On 16th January Adam Hamilton posted a piece entitled Silver’s Extreme Parabola warning of a potentially savage correction soon. He will probably be proved right, albeit right somewhat too soon, for when he posted that article silver was about $94 (on his chart) and yesterday morning it briefly touched $118. Hamilton is imbued with common sense and a lot of experience so I made a note of his observations which concurred with my own, but didn’t say anything because investors were having such fun and I didn’t want to “rain on their parade” and also I figured that we might as well squeeze as much profit out of this situation as we can before SHTF.

Yesterday’s dramatic candle in silver proxy SLV following a parabolic blowoff move does suggest that it may be about to hit the fan imminently. On the latest 4-month chart we can see that SLV even ran way ahead of its steep parabolic uptrend to become massive record overbought with volume exploding to huge levels as a bearish looking candle formed that can be classed both as a “Gravestone Doji” or a “Shooting Star” which are classic indications of a terminal blowoff. This candle doesn’t mean a final top but does indicate a high probability of a correction or at least a period of consolidation occurring soon that would help to rebalance sentiment, thus paving the way for future gains.

At the same time yesterday a decidedly bearish looking candle appeared on the chart for Pan American Silver. It was a so-called “Belt Hold” line which is where the stock opens at the day’s high and closes at the day’s low and it is more significant if it occurs on high volume, which it did. These candles usually lead to a significant drop.

All this was the reason that an email alert was sent out earlier saying that it would probably be prudent to take all or partial profits in the most heavily overbought silvers.

End of update.

Posted at 1.50 pm EST on 27th January 26.