Silver Loses its Shine

The atomic number for silver is 47.

That's how many protons are in the nucleus of every single silver atom in the universe.

In 2011, at the peak of the most recent commodity bull run, silver, as represented by the iShares Silver Trust ETF (NYSE ARCA: SLV), was not able to close above $47 on the weekly time frame. Although it hit a high of $48.35, its highest weekly close was $46.88 for the week of April 25th, 2011.

Silver's atomic number was its own undoing - an intrinsic resistance that was not overcome.

Since 2011, SLV has not been able to reclaim its once glorious highs. In fact, it has now lost all of the gains made since the 2010-2011 bull run, and is once again crashing through chart support levels that had earlier served as a cushion in preserving its value.

$SLV : iShares Silver Trust ETF

As can be seen on the weekly chart above, the $18 level was a crucial one for the bulls to uphold. Going back to the Summer of 2010, it was when the $18 level was breached to the upside and persistently held above that the bull run in SLV really began to take off, as noted by the elongated blue arrow.

The $18 level has held on multiple pullbacks in price beginning in the Summer of 2013 and extending into the current year. However, for the week of September 9th, 2014, we closed below $18 for the first time since August 2010, with SLV finishing at $17.89. Since then, the downwards spiral has continued. SLV closed yesterday's trading session at $17.08.

-DMI is evidently above +DMI, so the bears dominate the SLV market in the intermediate term. Although the ADX line is not pointedly rising, it is beginning to slope up a bit, and any further continuation higher would allude to a trending move lower for SLV moving forward.

Conclusion

At this point it's hard to say where SLV will settle and establish a prolonged base.

The $14 level seems like it could potentially get tagged, especially if bearish sentiment persists. However, there are likely to be erratic short term fluctuations in price, as shorts cover while longs attempt to take advantage of that by buying into any short covering rallies as well.

For now, silver has lost its shine, as traders and investors alike focus their eyes on the equity markets in search for yield. Fast moving technology and internet stocks are all of the rage - parking one's cash in precious metals just doesn't seem to be the most alluring thing to do at the moment.

Sooner or later, silver and gold will find a long term foundation and consolidate. However, it's irresponsible to suggest when this may occur, as no one can say with full certainty.

The precious metals are recognized by cultures across the globe as long term stores of value because of their perceived endogenous worth, but right now, they are simply not precious in the eyes of Wall Street.