Now that the silver price is following through, let’s review this blurb from NFTRH 809:
Silver works best by weekly chart these days. We began managing the bullish pattern and the target of 35 back in 2023 and damn did it take a long time to prove out. There was a breakout, a classic retest of the breakout and last week, a new surge upward. This can only be described as technically bullish. Especially with much higher upside thrust volume than the pullback/test volume.
That accompanied a weekly chart showing the measurement to 35 based on the pattern breakout. Here is the in-day status of silver by weekly and daily charts. The pattern breakout measures to 35, as previously belabored. But it needed to be activated, which it was when it spiked through 26 and tested, which it was on the pullback over the last couple of weeks. Now it is technically clear to go for target.
The daily chart shows that the SMA 50 was also tested successfully. Still a bullish picture, obviously.
The Plan
At least according to how I see it, the plan is for silver to put on the momo and go for that target, at which point it would be overbought and subject to volatility/pullback. But targets are not stop signs. They are objectives. So if it is reached there is no rule that says it has to stop. Again, let’s consider how long the precious metals had been on the outs compared to stocks. Since mid-2020. That correction built up power. Stored it as if in a fuel cell.
Silver is the precious metals leader, but gold is where it’s at in the bigger picture, in my opinion. So I use silver as a sector indicator while holding SLV. On that big picture the economy in my view is transitioning back away from the bump up in inflation signals as expected, probably through a temporary Goldilocks phase on the way to market liquidity problems later in the year.
In other words, a counter-cyclical environment is oh so slowly engaging and that will benefit quality gold mining stocks (and some scams, alike). If silver hits the target at 35 it will be interesting to see whether it is ‘bull on’ for the sector or a temporary caution point. But what I am seeing in general only firms my resolve that this is the next leg of the bull market, volatility or otherwise.
