The largest exchange traded funds backed by physical holdings of silver are down almost 42% in 2013 following Thursday’s strong volume drubbings of nearly 4%.
With Thursday’s close at $18.81, the iShares Silver Trust (NYSEArca: SLV) is just about 6% removed from its 52-week low. The $18 area represents silver’s July lows and the longer the metal labors below $20, the further removed it is from notching a legitimate technical breakout. [Maybe Some Help for Technical ETFs]
The bleak near-term technical prognosis for long silver ETFs is, of course, good news for the ProShares UltraShort Silver (NYSEArca: ZSL), the double-leveraged bearish play on silver. ZSL is up 20.7% over the past 90 days while SLV is down 12.2% and as silver wilts, ZSL looks more attractive.
ZSL’s “daily chart shows the gap down below support at $86 this week. Notice how all three major averages (20, 50, 200) are now trending higher and in proper order. The 50-day MA has crossed back above the 200-day MA as well,” according to Deron Wagner of Morpheus Trading Group.
Even with the benefit of Thursday’s 7.7% gain on below average volume, ZSL is an interesting technical situation. If silver were to rally, ZSL would need to find support at its 20-day moving average or risk a decline to the low $80s.