Still looking for lower, and a top in silver?

Yesterday I wrote:

"it looks like we're going to go lower if not tomorrow, then on Tuesday."

And lower is just what we got today, with the Dow dropping 26 points.

But before we go any further, I want to show you this truly amazing chart:

This is the daily chart of SLV, the popular Ishares silver ETF. I usually like to wait for some sort of confirmation before calling a top, but if this isn't a top, I'll eat my short hat. Notice how SLV, which has been rising steadily for ages, suddenly went exponential on Aprill 14th. After that, it not only went up every day, it gapped up every day. Then today it hit a record 47.00 before retreating to close at 45.83.

And take a look at the eye-popping volume. Exactly when it started going exponential, the volume picked up, culminating with today's amazing 190,000,000 shares, more than double yesterday's. This is a classic blow-off top. The stock goes exponential, finishing with a hanging man on very high volume. The next day is generally lower. I have enough conviction in this pattern that I sold 3/4 of my SLV holdings today at 46.48, and these were practically heirloom shares that I bought way back at 11. I think that ultimately silver can go even higher, but this particular party that began last September is about over for now.

Anyway, back to the Dow. The Dow's latest weekly candle was also a hanging man and today's candle was also a hanging man. In addition, today's close at 12,480 took us to the right edge of the three day ascending regression trend channel, and that is a bearish setup.  And the indicators are all now firmly in overbought territory.

Then yesterday I noted that the VIX seemed to have a lot more chance to go up rather than further down.  And it did in fact rise today, closing at 15.77. As I've noted before, when you see the VIX put in a bottom, that is also a reversal signal for stocks.  For tomorrow, the VIX still has plenty of room to run.

And finally, all three futures (ES, NQ, and YM) are lower right now at 1 AM EDT, though admittedly not very convincingly, being off less than 0.1%.

So technically, I'd say that my call last night for a lower market on Tuesday is still valid. The only possible wild card in this mix is the fact that Uncle Ben Bernanke is going to deliver a speech on Wednesday. Now I can't exactly imagine him giving a speech designed to tank the markets, but there's never any telling how these things will play out. So I'm looking for another slightly lower day as the players position themselves for the real action which will unfold on Wednesday. Then we'll see.  That's all she wrote.

Trades

In addition to unloading my SLV today, I sold my Alcoa (AA) at 16.85.  And I sold Henry Schein (HSIC) in my IRA.