What's next?

Alright, well we've been waiting for a strong move one way or the other, and it looks like we got it today. But this is looking like a washout to me here. For one thing, both gold and silver have RSI's at 30, and miners are trading at absurdly low historical levels relative to bullion.

I don't see an immediate recovery, but I don't see a lot of downside either, and if we fall another 3-5% or so I'm looking to buy calls. 

In gold, let's go back to a multi-decade long term weekly chart. We see that, although this bull market "officially" is thought to have started in 2001, it wasn't until 2004 that the $415 level was touched again. That level had been struck several times in the 1990's, so it really was nothing special. Then, half of 2005 was a long consolidation culminating in a "triple bottom" at $415 (circled). I've drawn a conservative blue trend line starting there, that was only broken in 2008. My wager is that that blue trend line will only be broken if there's a real 2008-type scenario repeat, where the financial system is believed to be on the verge of collapsing (assuming gold this time doesn't pick up the safe haven bids right away). I'm betting 2008 isn't happening here (on the contrary, how many of these "eurozone will collapse" scares have we had?), which is why I'm thinking this is just the last stages of a big and protracted washout since the $1900 peak. I think we move more or less sideways to the blue line, or the 89-week moving average (black, dotted) right below it. (Funny how the best fits often seem to be Fibonacci numbers.) Check how the 89-week MA has also only been violated in 2008, going all the way to the rounded bottom in 2001.

 Then we have the 21-month MA (another Fibonacci number, green) which I spoke about on Sunday. It's at $1560.

 So I'm thinking the $1550-$1570 range is a good buying opportunity, which is only 3-4% from here. Assume silver has greater downside, and $27.50 is looking good for silver, suggested also by this chart:

 I drew the bottom of the (perfectly) parallel downward channel since April 2011 as a dotted line, because I don't think it's in play: too many strong levels of support would have to be violated. The ~$22 level, where the dotted bottom of the descending wedge hits a long term trend line sometime this year, however, is a nontrivial possibility, I suppose.

I should also add that it's not *impossible* the bottom is in today. Evidence for that is the gold silver ratio:

As well as the 3 year silver weekly chart: