On January 11th, we expected the US Dollar to top as Sentiment was uber-bullish, which would lead to a nice rally for Gold, Silver, and (Mining) stocks. That day, the USD index closed at 81.35, Silver at $29.89, and Gold at $1,641. (Click HERE for the article)
Today, the USD stands at 78.90, Silver at $33.89 and Gold at $1,733.50, so we got what we expected.
On January 9th, we posted the following chart, which compares the current silver “bubble” to the Nasdaq Bubble a decade ago:
(Click HERE for the entire article)
Now let’s see where we are today.
Just like the Nasdaq, Silver has set a lower/equal low, accompanied by a higher low of the MACD index, and has now rallied quite sharply:
Compare this to the Nasdaq:
An overlay of both charts shows us where we are today:
If we zoom in a bit:
If the pattern holds, we should be about halfway the “Bull trap”, as many will view this as the Return to “normal”.
If the pattern doesn’t hold, and silver blasts through $40, it’s probably on it’s way to the all-time high. In that case, the next big move would be to the upside, with potential targets of $70 and potentially tripple digit silver prices.
As long as the pattern holds, I would be careful if silver hits $38.
For more Analyses and Trading Update, please visit www.profitimes.com!
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- Technical Analysis – Reversal Patterns II
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