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Dan Norcini continues:
“We will see the first round of short covering in silver when it breaks $32.50. There are a number of speculative shorts in that market. These shorts are weak hands and on a break of $32.50 they will capitulate. This short covering should move silver $2 higher very quickly.
What this means is that if $32.50 gives way on silver, you would see a rush to $34.50 because of the tremendous amount of pent up buying that would come in from the sidelines....
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“As silver approaches $34.50, if that level is taken out on the upside we will see a major short covering panic in the silver market. This major short covering has the potential to move silver to $40 very quickly once $35.50 is taken out on the upside. Helping to fuel this rally will be fresh buying that comes into the silver market as it gains momentum.
So once we get to $34 - $34.50, we would be on the cusp of seeing a sustained uptrend in silver. We would then need to see a breach of the $35.50 level. Above $35.50 we will start to see silver trend very aggressively. It won’t take long for silver to hit $40 once that market takes out the $35.50 area.
Below is the HUI/Gold monthly ratio chart. This chart covers 12 years. While we have seen absolutely no evidence that the mining shares are ready for a turn, what is interesting is that the value buyers are stepping in to this market and stabilizing it to some degree.
Again, there is no evidence of a turn at this point, but as I mentioned earlier, KWN readers need to keep an eye on the silver market. If indeed silver does make a decisive break above key levels and force major short covering, that will drag the gold market through some key breakout points as well. This would then turn the HUI (gold mining) index around, and this area will have turned out to be a great buying point for these value investors.
© 2013 by King World News®. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. However, linking directly to the blog page is permitted and encouraged.
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Eric King
Norcini - Silver Now Very Close To A Major Short Squeeze
On the heels of some wild trading in gold and silver, today acclaimed trader Dan Norcini told King World News that the silver market is now approaching key levels which will set off major short covering if breached. Norcini also provided two key charts. Here is what the acclaimed trader had to say: “If silver decisively breaks $32.50 we will see momentum-based buying come into the market. This is what is necessary to fuel a sharp uptrend in silver of the type of nature that we’ve seen in palladium and platinum. A break of $32.50 on silver would also signal a shift in sentiment regarding inflation.”
© 2013 by King World News®. All Rights Reserved. This material may not be published, broadcast,
rewritten, or redistributed. However, linking directly to the blog page is permitted and encouraged.
January 30, 2013
