The iShares Silver Trust (NYSEArca: SLV) has had a humbling year, losing 31.7%, a performance that is 840 basis points worse than the SPDR Gold Shares (NYSEArca: GLD).
Still, investors have stuck by SLV. While GLD is the worst ETF in terms of 2013 outflows having bled almost $23.4 billion, SLV has seen year-to-date inflows of almost $361 million. [Gold ETFs Finally See Inflows]
SLV’s chart indicates bullish may not be the profitable near-term view on the ETF. After violating support at $25 earlier this month, SLV “formed a five-month consolidation pattern at the lows. After a few months above the 50-day moving average, the price action cracked below the 50-day MA in early November and broke the uptrend line,” said Deron Wagner of Morpheus Trading Group.
Unfortunately, things have gotten worse, not better, for SLV in recent weeks as the ETF is trading below $20 at this writing.
“Now, the 20-day EMA is below the 50-day MA, and the 50-day MA is sloping lower as well. The 200-day MA also remains in a clear downtrend, so all the moving averages are in the correct order to indicate a confirmed downtrend is in place,” notes Wagner.
With SLV down almost 8.7% since Oct. 30, a near-term bounce for the volatile fund could be in order. Whether that bounce ensues is another matter altogether and whether it is enough to take SLV above its 200-day moving average, more than 12% higher than where the ETF currently resides, is debatable.
SLV has not traded above its 200-day line since March. Traders looking for a bearish play on SLV can consider the double-leveraged ProShares UltraShort Silver (NYSEArca: ZSL). ZSL is up 6.5% this week.
iShares Silver Trust
Tom Lydon’s clients own shares of GLD and SLV.