The most recent drop in precious metals carried silver futures lower by nearly $3.00 per ounce, forming a new leg down in a textbook Channel Down chart pattern. The pattern, shown below on a 240-minute time interval, is providing swing traders with very clear pivot points as the market bounces between clearly defined support and resistance zones. This leg of the Channel Down began when silver failed to penetrate resistance at the top of the channel near $36.50 and then reversed sharply. After the prolonged slide from this swing high, Tuesday’s modest bounce arrived almost perfectly at the lower channel support provided at $33.40 per ounce. This price level is currently holding, which may indicate a continuation of the Channel Down chart pattern and a retracement to come as the trading week progresses. A breach of the support trend line would initiate a very bearish downside breakout signal, with the possibility of much lower prices. Barring this development, the market is poised to remain range-bound within this channel, with expectations for another leg up towards the established resistance zone near $36.00 per ounce.

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