Silver is a funny one, we have been of the opinion for a long while now that it is undervalued, and even without it’s currently very high Gold / Silver ratio (64 to 1 as opposed to the traditional 14 to 1 or so) that it is undervalued in today’s market on a pure supply / demand basis and has huge upside potential.
However there’s no doubt that its very volatile and (we think) easily controlled by several of the the large bullion banks massive short positions, others including notable experts in the silver market think the same and we have to concur, and unlike Gold, so we don’t try to trade Silver at all, we take the buy and hold long term strategy, safe (we think) in the knowledge that it will continue on upwards into the stratosphere whenever the corporate’s games finally blow up in their faces, and they will, no-one can beat the markets forever.
So when we get articles like this one from David Bannister of www.markettrendforecast.com in the mail, we cant help but hope the time has come, you never know.. David’s reasoning is based on technical analysis whereas ours is based on a more long term fundamentals view, because we just accumulate a few kilos here and there and ignore the daily and weekly gyrations. – But lets hope he’s right..
Silver About To Break Out Big!
Silver is one asset class I do not cover very often, but have been largely bullish on since $6 an ounce many years ago.
It can be considered “poor man’s Gold” as they say. I believe Silver is about to stage a pretty large advance based loosely on the Elliott Wave pattern I see unfolding after a 9 odd month consolidation.
(Obviously, there are also fundamental fiat currency/debt events worldwide that give it the underlying bull chart pattern). Since the average person can’t run out and buy an ounce of Gold for $1,240 tomorrow [Edit actually they can if they want to, here] as the unfolding of the fiat crises continues to enter the public psyche, you will see a strong populace movement into buying silver, silver coins, etc.
To wit, many silver stocks are moving up strongly of late, signally an imminent breakout of this precious and industrial metal.
The triangle pattern has taken nearly 9 months so far, and a move over $19.50 could start a multi-month run targeting $26-$29 per ounce for starters before a broad pullback. A few silver stocks worth looking at include SLW (Silver Wheaton, which purchases future silver mine production in advance at a discount), a long-time favorite of mine and Fortuna Silver, a growing producer and explorer favored by some of the brightest minds in the business. I do not own shares in either, so I have no inherent bias to mention them other than they are worth your time to review sooner than later. TMTF does not offer stock or trading advice, so please do your own research and consult a professional if need be.
I post the Silver chart below and my outline shows my views of a multi month 5 wave bullish triangle pattern on a weekly chart. Silver needs to bust through $19.50 per ounce to confirm, but I suspect we will see this fairly soon.
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