As we kickoff the third week of trading in May, today James Turk told King World News that the massive silver base is preparing to explode higher.
May 21 (King World News) – James Turk: “We need to talk about what’s going on with silver, Eric. Probably not too many people want to hear about silver right now, which actually is very bullish. Contrary thinking is always very important when it comes to markets, as is patience, and we’ve needed plenty of that lately.
But here’s the important point. The same outstanding opportunity that we have been speaking about for months is still there. It’s just taking more time and more of our patience before we get the all-important breakout in silver that I believe is coming.
Over the last few times we’ve spoken, I’ve been updating my chart of the daily spot silver price in London. The chart is forming a huge reverse head-and-shoulders pattern, which is usually a very reliable indicator of a market bottom. This pattern is now nearly 8-month old. The bigger the base, the more powerful the rocket-shot will be when it finally launches. It’s not hocus-pocus, Eric. Chart patterns repeat for a reason.
They reflect investor sentiment and also investor action. In other words, a reverse head-and-shoulders pattern forms for a reason. When value investors see that a market is cheap, it attracts attention – and money. The bottom is reached when buying power begins to overtake selling pressure. Investors realize the asset forming the head-and-shoulders reflects good value.
So they step up to the plate and buy, which causes an initial bounce. The bounce typically ends at the previous high, which forms the beginning of the neckline. After the head is formed, we get the right shoulder. It is in effect a test of support. And you can see in this chart, silver is actually forming a second right shoulder, which is rare, but it does happen.
What this means, Eric, is that despite everything the central planners are throwing at silver – and gold too for that matter – support for silver above $16.00 continues to hold.
Last month we got a small taste of what lies ahead for silver. Silver penetrated overhead resistance at $16.80, and soared to $17.35. But it failed to hurdle the neckline at $17.40. Earlier this month silver tested $16.80 yet again, and last week fell back to test $16.20 once more. So the base is continuing to grow and get bigger.
Even though month-end option expiry begins on Thursday and lasts through the end of the month, it nevertheless looks to me like silver is probably ready to start climbing higher again. And when it hurdles $16.80 this time, I do not expect to to stop at $17.40.”
Speaking of gold & silver..
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