Silver is waging a fierce battle at the current $34.00 level.

As we pointed out in our last analysis, we speculated that a double top had formed in silver’s chart and shortly after we wrote that silver did come off the highs and traded down to below $34.00 to as low as $33.57 but it didn’t stay there and quickly reversed course.

At the moment, it is waging a fierce tug of war with the $24.00 level.

The double top formation is confirmed with the breach of $34.10 but as of yet, silver looks to be correcting off the drop from $35.44 before what I predict will be a continued fall to the high $30.00 range near the 200 day moving average.

I will admit though that the longer silver holds out here, the better the bullish argument becomes as the RSI has now worked itself off nicely.

However, there is a very complex head and shoulders pattern forming in the Euro that I feel will take that currency down and the USD up, making silver a victim to the imminent dollar rally that should take the USD over 82.00 on the index.

Silver is surely putting up a good fight here though but I feel too much buying power has been used up trying to keep it here and that this tug of war between the bulls and the bears will end shortly with the bears prevailing, sending prices to the highlighted range on the chart. Last night’s high could have ben the final pop off the correction from the move from $35.44 and we will now resume the next leg down.

Disclosure: I took off my October puts the other day during the intra-day plunge for a nice 70% gain. Yesterday I moved into the November $32.00 puts on the SLV at 68 cents per contract.