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The iShares Silver Trust (SLV) is tied to silver prices. It peaked at $34.08, which is the 38.2% Fibonacci retracement resistance from the August 2011 highs at $46.98.

• The 50% retracement resistance is at $36.20, and a weekly close above this level will be bullish.


• There is short-term support now at $31.52, with the 38.2% Fibonacci retracement support and 20-week EMA at $30.71.


• The 50% support is at $29.68, with additional chart support at $29.28.


• The weekly OBV moved through its WMA and overcame its downtrend (line a) in August.


• The OBV is now testing its WMA, which is rising slightly.


• The daily OBV (not shown) did not confirm the recent highs, and is now below its WMA.


• There is initial resistance now at $32.80 to $33.20.

The Global X Silver Miners (SIL) was one of the third quarter's top-performing ETFs, and is made up of 35 silver mining stocks.

• The daily chart shows a broad trading range (lines b and c) since the early September highs.


• There is support now at $23.60 to $23.90 and the uptrend (line d).


• Additional support at $23 (line c), with the 38.2% Fibonacci retracement support at $22.36.


• The now rising 200-day MA and the 50% retracement support are in the $21.30 area.


• The daily OBV completed a well-defined bottom in early September at the downtrend (line e).


• Volume was heavy on Tuesday as buyers stepped in. The OBV has just rebounded back to its flat WMA


• The weekly OBV (not shown) is holding up much better, as it is acting stronger than prices.


• There is strong resistance at $25.76, which was the recent high and also is the 61.8% Fibonacci retracement resistance from the 2011 highs at $31.34.

What it Means: The Spyder Gold Trust (GLD) and iShares Gold Trust (IAU) have declined for the past two weeks, and the correction could last another two to three weeks. For those not already long, as recommended in June or July, a 2% to 4% further decline is needed to take prices to a good entry level.

It is still my view that gold will move to new highs in 2013, if not sooner, with likely upside targets in the $2,000 to $2,200 area.

The outlook is similar for silver, and the Global X Silver Miners (SIL) is acting better than iShares Silver Trust (SLV). Both look attractive at lower levels. Silver has next upside targets in the $40 to $42.50 area.

How to Profit: For Global X Silver Miners (SIL), go 50% long at $23.04 and 50% long at $22.48, with a stop at $20.95 (risk of approx. 7.8%).

For the iShares Silver Trust (SLV), go 50% long at $30.90 and 50% long at $30.34, with a stop at $28.32 (risk of approx. 7.5%).

For those not already long GLD or IAU, go 50% long the iShares Gold Trust (IAU) at $16.56 and 50% long at $16.34, with a stop at $15.72 (risk of approx. 7.5%).

Portfolio Update: Investors should also be 50% long the SPDR Gold Trust (GLD) at $152.42 and 50% long at $150.28. Use a stop now at $157.22. Traders should sell 25% at $178.12 or better.

Investors should be long multiple positions in the iShares Gold Trust (IAU) from $15.68 to $15.42, with a stop at $15.72.

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