This type of gapping action in the previous metals this morning is to be expected, even in a bottoming process. You can expect random, violent moves in both directions as the market is undergoing a stringent test to see where its next major move will be, especially considering the precious metals and miners have been trading largely sideways for over a year now.
Silver, in particular, offers the best context early this week to see if there is something more ominous about this gap down, or instead if it is simply another shakeout.
On the daily chart for the ETF, the first level to observe is this 20-day moving average, highlighted by the yellow arrows.
Fearless buyers should at least give it a go at defending this area, as we have seen from them in recent weeks as silver made an impressive move.
But, overall, these types of moves are the rule, not the exception, even during a major bottom. Roll with the punches and keep those stops in place, or be quick to lock in gains into the pops if you cannot stomach the swings.
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