Silver Poised To Explode

Since my post on Wednesday didn't jinx the price of silver, I'm going to keep riding the horse.  In fact, contrary to the expectations of many, silver has moved higher thru Thursday's option expiry and thru most of the "roll" period in the futures from September to December.  Not only is this price action exceedingly bullish, but I can not recall anytime during the last 9 years that silver has moved sharply higher like this during Comex options expiration/futures roll (that's not to say it hasn't happend, I just can't remember it if it has).  This price/volumn action further underscores the bullishness of the market.

Here's is an updated weekly chart of September Comex silver.  I can't recall ever seeing a chart formation in silver that looked this bullish.  Recall that when gold broke out of its massive head n shoulders formation, it ran from $1030 to $1250, or 21%, in a short period of time.  Here's the chart:

(click on chart to enlarge)

Silver, which typically lags gold until the end of a bull move, is getting ready to break out of its massive HnS formation. When silver makes a big move, like in 2005-2006 for instance, it outperforms gold by at least 2-to-1. If we apply that metric to silver on its HnS breakout, that would give it an initial target of $26.  I know several chart technicians who believe silver can make an initial run to $30.  I'll stick with my view for now and enjoy being wrong if that's the case.

I want to finish with a quote from James Turk's interview this week with Eric King on King News World:  "More people will be jumping on as we go higher but we're still in the very early stages of what is going to be a major bull market in silver over the next several years."

I can attest to this statement, as I was at a party this weekend and several people who poo-poo'd my economic and metals market analysis several years ago were grilling me about buying gold and silver.  Many of them laughed at me when I sold my house in 2004, but admitted they are now bummed they didn't do the same.  As I stated yesterday, the housing market is still far from a bottom and the precious metals bull still has a long way to run.

I regard Turk as knowing and understanding as much about the precious metals market as anyone out there. He explains clearly and succinctly exactly why the bull market in gold/silver, and specifically in silver, is still very young.  Here's the link and I would recommend paying close attention:  James Turk on silver

Of course, now that I've jinxed silver, if the bullion banks decide to raid the Comex this week in light pre-holiday trading, make sure you hold your breath and buy with both hands.  Silver is going much higher before the end of the year.