Silver is about to test resistance of a giant bull flag, one that is in the making for 2.5 years. Rest re-assured, resistance is resistance until proven otherwise. More importantly, however, is the breakout that eventually will come, it will be explosive and push silver much higher, ‘in no-time’. But, didn’t we say all this, countless times, referring to our silver forecast?
Last week, we were on record stating that fear is rising and Gold & Silver Will Be Obvious Beneficiaries:
Gold is strongly correlated with Treasuries. It is also inversely correlated with the USD. What we see unfolding in markets right now is resistance in the USD. Since Thursday, we also observe a rise in Treasuries. Both suggest that the market believes that Fed MUST stop its aggressive hiking campaign. The TLT chart confirms a bottoming formation in Treasuries. Not a regular bottoming formation, but a really strong one.
When Treasuries are in an uptrend, gold and silver tend to follow.
Treasuries are moving higher right now. Sooner or later, they will unleash sufficient ‘intrinsic power’ for precious metals to create their own uptrend.
In the meantime, we get a very interesting setup in silver now.
Rest re-assured, it is matter of time until silver will erupt. What an eruption it will be once 23 USD in SLV (not spot silver) will be cleared.
The silver chart (both SLV and spot silver) have a giant bull flag that is in the making for 2.5 years now. One thing we know from history is that the longer the bull flag, the more explosive the power once the bull continues its upward trend.
Equally important is the chart dynamic that is playing out right now. As seen, the key retracement level is being tested ‘as we speak’. The falling trendline that originated in the summer of 2020 is now very close to the key retracement level. You know what this means: if 2 crucial chart dynamics coincide on the timeline, it becomes easier for price to overcome them. This also implies that, once done, there is power tremendous as sellers got the message from the market.
Junior silver miners will react to this, they are already starting to react to the coming breakout in silver that is truly inevitable, as evidenced in Junior Silver Stocks: A Triple Bullish Signal, ‘Under The Radar’ Wildly Bullish.
Our silver position in the Momentum Investing portfolio, a pure beauty, is doing really well. The upside potential is tremendous. This week, we wrote this gold & silver update to premium members, available in the restricted area for any (current or new) member: Leading Indicators Look Promising & Selection Of Top Gold/Silver Stocks.